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Kevin Warsh Is Confirmed as Fed Chair in 54–45 Senate Vote
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- Kevin Warsh was confirmed as the Federal Reserve’s 17th chair Wednesday with a 54–45 vote, the narrowest margin since 1977.
- Outgoing Chair Jerome Powell, whose term ends Friday, plans to remain on the Fed’s board despite President Trump’s insistence he leave.
- Warsh, a former Fed critic, faces hot inflation readings and questions about the Fed’s independence from the White House.
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How Eight Tumultuous Years Pushed Jerome Powell and the Fed to the Limit
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- Jerome Powell weathered a sustained political assault on Fed independence and brought down inflation without a recession.
- The Fed launched unprecedented emergency programs during the pandemic but later made its biggest mistake by deeming rising prices transitory.
- The Fed raised rates at the fastest pace in four decades to fight inflation, leading to bank stress before achieving a soft landing.
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Bank of Canada on Alert for Quick Change in Inflation Dynamics, Minutes Say
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- Bank of Canada officials agreed on the need to change course quickly on rate policy depending on Middle East developments and U.S. trade tensions.
- The central bank left its target for the overnight rate unchanged at 2.25%, anticipating little change if the economy evolves as forecast.
- Gov. Tiff Macklem said rate cuts might occur if President Trump imposes new trade restrictions on Canada.
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Boston Fed’s Collins Flags Rate-Hike Scenario as Inflation Risks Tilt Higher
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- Boston Fed President Susan Collins flagged the possibility of raising interest rates if inflation pressures broaden in coming months.
- Collins supported removing language at last month’s meeting suggesting the next rate move would be a cut, advocating for more agnostic communications.
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Global Nature of Energy Shock Raises Inflation Risk, ECB’s Lane Says
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- ECB Chief Economist Philip Lane stated the global nature of rising energy prices, linked to the Middle East conflict, may cause slower eurozone growth and higher inflation.
- ECB Chief Economist Philip Lane noted the global shock means costs rise worldwide, creating a compounding effect on final goods prices in Europe.
- The energy price rise could trigger higher wage demands and second-round effects, potentially requiring the ECB to raise its key interest rate.
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Wholesale Inflation Shot Higher in April
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- Wholesale inflation rose 1.4% in April, reaching a 6% annual rate, the highest since December 2022, due to the Iran conflict.
- Wholesale energy prices rose 7.8% in April, following hot consumer-inflation numbers and higher energy costs across the economy.
- The producer-price index helps forecast the Federal Reserve’s preferred PCE inflation metric, which has been above its 2% target.
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Longer Working Lives and Immigration Keep Eurozone Economy Growing, ECB Says
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- The European Central Bank said immigration is essential for the eurozone’s continued economic expansion amid an aging population.
- Increased employment, partly from older Europeans working longer, accounted for half of eurozone growth since Q3 2023.
- Migrants contributed 4.2 million workers to the eurozone labor force between 2021 and 2025, increasing their share to 10%.
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U.K. Economy Accelerates to Outpace U.S. as War Headwinds Loom
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- The U.K. economy grew 0.6% in the first quarter, but its resilience faces severe tests from the ongoing Middle East conflict.
- The International Monetary Fund in April cut its 2026 U.K. growth estimate to 0.8% from 1.3%, citing gas import reliance.
- The Bank of England issued three economic scenarios, stressing future dependence on the energy-price shock from the war.
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OPEC Cuts Oil Demand Forecast As Hormuz Shock Pushes Output Lower
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- OPEC’s crude output fell last month as the near closure of the Strait of Hormuz forced Gulf producers to curb production, prompting a cut in its demand forecast.
- The United Arab Emirates quit OPEC last month, raising questions about the cartel’s future and Saudi Arabia’s role as market stabilizer.
- OPEC now forecasts global oil-demand growth of 1.17 million barrels a day this year, down from 1.38 million previously.
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About Us
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WSJ Pro Central Banking brings you news and analysis from a global team of reporters and editors at The Wall Street Journal and Dow Jones Newswires. Send your tips, suggestions and feedback to service@dowjones.com. An artificial-intelligence tool created these summaries, which are based on the text of the article and checked by an editor. Read more about how we use artificial intelligence in our journalism.
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