Kevin Warsh’s Fed is not expected to make any change to rates for a while,

Amid heightened anticipation, Kevin Warsh will head his first meeting as Federal Reserve chairman but is expected do very little, at least initially, according to the latest CNBC Fed Survey.

The 32 respondents, including economists, fund managers and strategists, as a group see no rate change at this meeting or any meeting through 2027. But 88% do expect the Fed at this week’s meeting to remove the easing bias in the statement that has signaled the Fed’s next move would likely be a cut.

Warsh comes in as the hand-picked nominee of a president who has been bullying the Fed for years for lower rates. But high inflation, spurred in part by the President Donald Trump’s tariffs and war with Iran, have taken those cuts off the table for now and pushed them out of the forecast horizon for the Fed Survey and the Fed Funds futures markets.

“While Warsh is generally perceived as dovish, he will inherit a committee that has become noticeably more hawkish,” said Gregory Daco, chief economist at EY. “Several policymakers have recently argued that rate hikes should remain an option if inflation remains above target, and concerns around energy-driven inflation pressures have only reinforced that bias.”

Warsh himself has said rates could be lower but has not said if his outlook has changed amid the recent surge in inflation and stronger jobs numbers. The announcement of a potential deal with Iran, which came after the survey was taken, could give Warsh flexibility to cut rates sooner than currently expected. As it is now, respondents don’t believe that high oil prices will lead the Fed to hike but see the funds rate basically unchanged from the current level of 3.62% through 2027.

On the plus side, the survey shows Warsh taking the helm of an economy that has been resilient to recent shocks and expected to remain that way. Forecasters nudged up their growth outlook, lowered the probability of recession from 33% in April to 25% and reduced their expectations for the unemployment rate.

Economist Hugh Johnson writes in: “Improving economic and employment conditions and modestly rising stock prices are common characteristics of the current stage of the stock market-economic-interest rate cycle. Early warning signs of a bull market-ending recession have not as yet surfaced.”

The outlook for U.S. GDP rebounded to 2.2% for this year, up a quarter point for 2026, and to 2.3% for next year. Both recovered most of the downgrade from the prior survey linked to hostilities with Iran. The unemployment rate for this year and next is expected to be mostly unchanged from the current 4.3% rate.

Several respondents said the outlook for a healthy job market should lead the Fed to focus on the inflation side of its mandate, which it has missed for most of the past six years.

“The FOMC ought to hike rates to nip rising inflation expectations in the bud and get closer to neutral policy,” said John Ryding, chief economic advisor for Brean Capital.

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