FINWIRES · TerminalLIVE
FINWIRES

Federal Reserve Watch for May 22: Warsh Sworn-In as Fed Chair, Says Will Lead Reform-Minded Fed

By

Newly Sworn-In Fed Chair Kevin Warsh (voter) was sworn in, saying that he intends to be reform-oriented and abandoning old models that were not serving the Fed's mission.

Fed Governor Christopher Waller (voter) suggested that the Fed's policy rate could remain on hold for some time, indicating that the risks are tilting back toward inflation. Waller also said that a rate increase is possible if inflation remains high rather than comes back down.

Recent comments of note:

(May 21) Richmond Fed President Tom Barkin (nonvoter) said that he expects supply shortages and economic uncertainty due to the Middle East conflict could eventually have an impact on consumer spending but said that so far consumers are seeing higher prices as temporary.

(May 20): Minutes of the April 28-29 FOMC meeting showed that a majority of participants appear to be leaning away from certain rate cuts in the near future and are open to the possibly of rate increases. Many participants, not just the three voters that dissented, wanted a change to the post meeting statement to reflect that possibility.

(May 19) Philadelphia Fed President Anna Paulson (voter) said she sees the current stance of monetary policy as appropriate but suggested that rate hikes may be needed this year if inflation remains elevated.

Related Articles

International

New Zealand Retail Sales Data Points to 'Solid Lift' in Consumer Spending, Westpac Says

New Zealand's retail sales data for the March quarter points to a "solid lift" in consumer spending, advancing a retail sector recovery that started in late 2024, Westpac said in a Friday report.The country's volume of seasonally adjusted retail sales hit NZ$26.04 billion in the March quarter, up 0.9% from the December 2025 quarter and exceeding Westpac's forecast for a 0.2% increase.Some of the growth in nominal spending, which rose 2.2% over the quarter and 6.1% from a year earlier, is a result of higher prices, especially for fuel, the bank said.Strong growth in tourist arrivals buoyed the results, as the volume of spending on accommodation rose over 6% during the quarter. Spending on food and beverage services also increased, while spending on footwear, apparel, and recreational goods fell, possibly reflecting an early reaction to the Middle East conflict, Westpac said.Given the impact of the Middle East conflict, the current quarter will probably be "a much tougher one for retailers, especially those selling discretionary items," the bank said, adding that the economy's second-half performance will depend on how the conflict evolves and how New Zealand's central bank responds to a spike in inflation.Westpac continues to anticipate gross domestic product growth of 0.8% in the March quarter.

$^NZ50
International

South Korea Consumer Confidence Bounces Back to Optimism

South Korea's composite consumer sentiment index rose to 106.1 in May from 99.2 in April, according to data released by the Bank of Korea on Friday.A reading above 100 indicates an improved outlook, while a reading below 100 suggests pessimism.Sentiment toward current living standards rose two points to 93, while sentiment on the future outlook gained five points to 97.The outlook for future household income was up two points to 100, while the sentiment for future household spending also rose by two points to 110.Optimism regarding current local economic conditions increased by 15 points to 83, and the reading for future domestic economic conditions was 14 points higher at 93.

$^KOSDAQ$^KS11
International

New Zealand's Total Vehicle Registrations Fall in April

New Zealand's total vehicle registrations were 4.6 million in April, a decrease of 28,966 from the previous month, covering both six and 12-month licensing periods, data from Stats NZ showed Friday.The decrease was driven by a decline in car registrations, which fell by 8,494 month on month to about 3 million, while rental car and motorcycle registrations dropped to 42,832 and 66,185 from 45,500 and 74,581, respectively, the report said.Compared with the year-earlier period, total vehicle registrations in New Zealand rose by 837 in April, the report added.

$^NZ50