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Kevin Warsh was sworn in Friday as chair of the Federal Reserve, taking the helm of the world’s most powerful central bank as the global economy faces an inflationary surge as a result of the war with Iran.
Policy makers and markets are bracing for the possibility the Fed’s next move will be rate hike rather than a cut, in contrast to President Donald Trump’s repeated calls for more monetary easing. Earlier Friday, Fed governor Christopher Waller, who had advocated for rate cuts earlier this year, said the central bank should make clear that it’s next move is just as likely to be a hike as a cut, warning that “inflation is not headed in the right direction.”
Trump branded Jerome Powell, Warsh’s predecessor, with the nickname “Too Late” for what the president perceived as foot dragging on rate cuts. He often insulted Powell in social media posts and his administration launched a criminal probe into remarks Powell made at a congressional hearing about cost overruns in a renovation of the Fed’s headquarters. Powell and some lawmakers described the latter move as an effort to influence or punish the chair and the central bank.
Trump, at Warsh’s swearing-in ceremony, appeared to address concerns about Fed independence when it comes to setting policy.
- “I want Kevin to be totally independent. I want him to be independent and just do a great job. Don’t look at me, don’t look at anybody, just do your own thing and do a great job,” Trump said.
Markets have inevitably offered a test to every new Fed chair over the last several decades. Warsh takes the job as inflation concerns are driving a surge in global bond yields that will likely require the central bank to adopt a more hawkish tone.
Cattle on Feed surprise: Cattle on feed as of May 1 were up 2% from a year ago, exceeding the average estimate for a 1.6% increase and marking the first year-over-year rise in 18 months. USDA said April placements rose 6% versus estimates for a 3.4% increase. Marketings fell 10% versus forecasts for a decline of 9.3%.
EU suspends some fertilizer duties: The European Union on Friday said it would temporarily suspend customs duties on key nitrogen-based fertilizers including urea and ammonia for a year to mitigate the effects of the Iran war, Reuters reported. Global fertilizer prices have surged following the virtual closure of the Strait of Hormuz at the end of February. Around a third of key fertilizer supplies typically move through the crucial waterway. The report noted the EU doesn’t depend on nitrogen-based fertilizers, particularly urea, that are produced in the Middle East, but prices for all types of fertilizer have jumped as countries race to find alternatives.
UAE steps up push to end war – report: The United Arab Emirates has made a more forceful push for an end to the Iran war in recent days, joining Saudi Arabia and Qatar in urging US President Donald Trump to give negotiations a chance, Bloomberg reported, citing several people familiar with the matter.The conversations have been driven by fears that any retaliation from Tehran, if hostilities resume, will plunge Gulf economies into chaos. In separate calls with Trump, leaders of the three US allies said military action won’t achieve America’s long-standing goals with Iran, the report said.
Hesitation on additional oil-reserve releases: Governments appear hamstrung on the question of whether to release additional strategic oil reserves to calm the crisis caused by the Iran war. The Financial Times reported that when asked whether talks over a second release of strategic oil reserves had begun, French Finance Minister Roland Lescure said hat the issue was not on the table when he hosted finance ministers from G7 nations, including US Treasury Secretary Scott Bessent, in Paris earlier this week.
- “We cannot release stocks — which are by nature finite — without having visibility on the duration and intensity of the conflict at this stage,” Lescure said in an interview. Even once the Strait of Hormuz does open, it will take several weeks for oil supplies to reach Europe, Asia and other regions, so visibility on the timing of when those flows will restart will be key, he added.
In March, the 32 countries in the International Energy Agency released a combined 400 million barrels of oil and refined fuel to address shortages caused by the war.
Egypt plans global grain hub: Egypt, the biggest buyer of Russian wheat, intends to create a global grain trading and storage hub, Supply Minister Sherif Farouk said Friday, according to Reuters, in remarks at a grains event in the Russian city of Sochi. Faruk said that Egypt is pursuing an ambitious and comprehensive strategy to transform the country into a hub for the storage and processing of grain crops as well as trading grain throughout the Middle East, Africa, and other regions.
Cargill’s new top trader: Cargill Inc. appointed Armando Giordano as its new head of world trading, Bloomberg reported, citing people with knowledge of the matter. Giordano is based in Geneva and replaces Alex Sanfeliu, who recently left the firm, the report said. He’s been with Cargill for more than 15 years, most recently running corn and ethanol trading, according to his LinkedIn profile.