Fed Pick Warsh Faces Sharp Doubts Over Independence, Survey Shows

Confidence in Kevin Warsh is split as he prepares to lead the Federal Reserve, according to the latest CNBC Fed Survey. Only 50% of respondents believe he will act mostly or fully independently, while 46% say he may not. The survey of 26 economists and analysts followed his Senate hearing, where Warsh pledged to protect policy independence but also said he would work with the government on non-monetary matters. Confidence improved by 13 points from the prior month, suggesting some reassurance after his testimony. Expectations for policy direction remain divided. About 58% see Warsh favoring interest rate cuts, while 65% expect him to shrink the Fed’s $6.7 trillion balance sheet, with an average projected reduction of $800 billion in the first year. However, 46% doubt any reduction will happen that soon. Most respondents, 81%, also oppose factoring artificial intelligence gains into policy before they appear in economic data.