Goldman sees no faster Fed cuts if Kevin Warsh replaces Powell

Goldman Sachs is pushing back on the most market-friendly version of the Kevin Warsh story. Even if the hawkish Fed nominee ends up replacing Jerome Powell, Goldman does not see a faster easing cycle, keeping two 25-basis-point cuts penciled in for September and December 2026 instead. The bigger constraint is the committee itself: the chair does not vote alone, and the current inflation shock still has the central bank looking over its shoulder.

That call matters because Goldman already moved its first expected cut from June to September on March 12, then pushed the second to December, citing rising inflation risks tied to the Middle East conflict. Reuters said traders were pricing only about a 41% chance of a quarter-point cut in September, and Goldman has said earlier cuts could still happen if the labor market weakens more sharply than expected. For desks that live off the shape of the rate path, the message is simple: a new face at the Fed would not automatically bring a friendlier curve.

The Fed’s own January 27-28 minutes show why. The 2026 voting lineup already included John Williams, Anna Paulson, Beth Hammack, Lorie Logan and Neel Kashkari, a reminder that policy power rotates well beyond the chair’s office. The Fed also holds eight regularly scheduled meetings a year, and Powell’s chair term ends May 15, 2026 even though his Board term runs until January 31, 2028. Warsh told senators on April 21 that he had made no promises to President Donald Trump about cutting rates, while Sen. Thom Tillis had delayed the confirmation process over a Justice Department probe into Powell before later signaling he would let the nomination advance.

The latest Fed commentary only strengthens Goldman’s point. Cleveland Fed President Beth Hammack said on April 15 that rates were in a good place and should stay on hold for a good while, while New York Fed President John Williams said on April 16 that the Middle East war is already driving up inflationary pressures. For Goldman bankers, traders and economists, that means the real story is not who gets the chairmanship title in Washington, D.C.; it is how much inflation, oil risk and committee politics keep rate cuts slower than the headline drama suggests.