



Trump’s demand for the Fed to ease its monetary policy looks harder to justify: What will Kevin Warsh do?
Subscribe to enjoy similar stories. The latest Bureau of Labor Statistics report showed that the unemployment rate slipped to 4.3% in January, from a prior 4.4%, as US payrolls expanded at twice the rate that economists had been expecting. While that’s great news for workers, it will make life a lot more challenging for Kevin Warsh, US President Donald Trump’s pick to become the next chair of the Federal Reserve.
Trump wants his nominee to slash interest rates, but Warsh’s Fed colleagues are likely to balk if the labour market continues to hold up this well, creating the conditions for a volatile first year on the job, starting in May. Although outgoing Chair Jerome Powell has faced similar pressure, Warsh will be seen in markets as an unproven and less predictable newbie at the powerful central bank. With Wednesday’s data in hand, the unemployment rate—the most important all-in labour market statistic—looks to be settling in around current levels.
It’s now been in the vicinity of 4.3%, plus or minus 0.1 percentage point, for most of the past year. A key exception was the short-lived jump in November, which now looks like a fleeting distortion created by the government shutdown that ended that month. Prior to Wednesday, concerns about the labour market had offered the clearest path to easier monetary policy, and an ebbing in those risks could foreclose on the possibility of additional cuts in 2026.
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