Newly appointed Federal Reserve chair Kevin Warsh will lead his first Fed meeting in less than a month. Ordinarily, I would feel sorry for a person in his situation. But since the guy is a rich, power-hungry jerk, I am looking forward to some great entertainment.

To set the table here, in his vast ignorance, Donald Trump has decided that interest rates should be much lower than they are now. He has muttered something along the lines of the Fed having a 1.0 percent interest rate instead of the current 3.5 percent rate.

Trump repeatedly threatened the outgoing Fed chair, Jerome Powell, who he had initially appointed. Trump started with insults on his Truth Social platform, moved on to threats of firing, and then told his Justice Department to cook up a criminal investigation.

While they at least temporarily suspended any prosecution, to get the votes needed in the Senate for Warsh, Trump has explicitly left the option on the table. And Acting Attorney General Todd Blanche has made it clear that he will indict people for getting Trump angry. Powell may still end up facing criminal charges for not going along with Trump’s demands to lower rates.

Trump also has said that he expects Warsh to lower rates or he wouldn’t have appointed him. For this reason, we might expect that Warsh will be looking to lower rates next month.

The problem for Warsh is that he can’t lower rates by himself. He would have to convince a majority of the 12-person Federal Open Market Committee (FOMC) to go along with lower rates. He is not likely to get much help here.

At the last meeting, there was only one person arguing for lower rates, Stephan Miran, another Trump appointee. Warsh replaced Miran in his seat on the FOMC when he became Fed chair. This means that Warsh will step into the meeting with 11 other FOMC members who wanted to keep rates unchanged at the last meeting. Several of them actually leaned toward raising rates.

The new data since that meeting all point to higher inflation and also a somewhat improved labor market. That is not a mix that makes a good case for lowering interest rates.

The overall Consumer Price Index increased 0.6 percent in April, after rising 0.9 percent in March. This brought the year-over-year rate to 3.8 percent, the highest since early 2023. The core wasn’t too much better, rising 0.4 percent in April, bringing the year-over-year rate to 2.7 percent.

The Producer Price Indexes (PPI) and the Import Price Indexes were arguably even worse. The final demand index in the PPI rose 1.4 percent in April, bringing the year-over-year increase to 6.0 percent. The core index rose 0.6 percent, bringing its year-over-year increase to 4.4 percent..

The non-fuel import price index rose 0.8 percent in April, bringing the increase over the last year to 2.9 percent. These prices, on items like imported clothes and cars, had been falling in 2024. (The import price index does not include tariffs.)

These data all indicate a rate of inflation that is well above the Fed’s 2.0 percent target, and considerable pressure from input prices pushing inflation still higher in the future. It is hard to see how Warsh would be able to convince the other 11 FOMC members that the new data since the last meeting justify a rate cut.

This puts Warsh in the interesting spot where he either votes to keep rates constant (there will likely be members pushing for a rate hike) and incurs Trump’s wrath, or he casts a pointless vote for a cut. If Warsh does the latter, it will be the first time ever that a Fed chair has been in the minority on a vote on monetary policy.

If Warsh ends up being the only vote for a cut, like his predecessor, Stephan Miran, it would be truly unprecedented for a Fed chair to be completely out of line with the rest of the FOMC. Most often, the FOMC has no dissents, as the committee works to reach a consensus. The Fed chair being the lone dissenter would be extraordinary.

This dissent may make Trump happy, but it likely takes Warsh further from the goal of lower rates. Unless Trump tries to jail the rest of the FOMC, it will be necessary to convince the other members that there is a good argument for lower rates. A vote for a cut with the data we have recently seen does not look serious. It is not going to carry weight with the people Warsh needs to convince.

As I said, if he weren’t a pathetic, power-hungry jerk, I would feel sorry for him. However, given the situation, I look forward to the entertainment.

Dean Baker is a senior economist at the Center for Economic and Policy Research and the author of the 2016 book Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer. Please consider subscribing to his Substack.