WASHINGTON — Ever since Kevin Warsh was nominated by President Trump in late January to lead the Federal Reserve, a question has lingered: Will he seek to raise interest rates to tame inflation or cut them as Trump has long demanded?
On Wednesday, Warsh may provide the first hints of an answer when he oversees his first Fed policy meeting as chair and holds a news conference afterward. Bond markets, which can swing sharply on a chair’s pronouncements, will be watching particularly closely for any signs of which way he leans.
“We expect the press conference to be pivotal,” Jonathan Pingle, an economist at investment bank UBS, wrote in a note. “This will be Kevin Warsh’s first public appearance as Chair. … We do not really know what his policy views are.”
Economists say Warsh will likely aim for a neutral approach, largely because he is taking over the Fed at a challenging time. Rising inflation has made it all but impossible for the Fed to cut interest rates anytime soon, which could stimulate growth and further raise prices. Hiring has improved noticeably since the beginning of the year, removing another key rationale for rate cuts. And the other 11 policymakers on the Fed’s rate-setting committee — including Warsh’s predecessor, former chair Jerome Powell — are split on whether an increase in the Fed’s key rate will be needed or if it can stay unchanged.
High inflation puts Fed in tough spot
Oil prices have fallen sharply on news that the U.S. and Iran have reached an initial deal to end their war, which could eventually cool inflation. Yet it’s unclear whether a permanent agreement can be reached.
“The right thing to do now is wait and see,” said William English, an economist at the Yale School of Management and a former top Fed economist.
Inflation has jumped to a three-year high of 4.2%, the government said last week, mostly because of higher gas prices. Even Trump has backed off a bit from his relentless demands for lower rates, and instead has argued that rate hikes — which the Fed undertakes to cool the economy and slow inflation — aren’t necessary.
In an interview earlier this month on NBC’s “Meet the Press,” Trump said, “Kevin is fantastic and I want him to do whatever he wants,” but added, “there’s no reason to raise rates.”
On Wednesday, the Fed is widely expected to keep its key rate at about 3.6%, where it has remained since last December. When the Fed reduces its rate, over time it can lower other borrowing costs for things like mortgages, auto loans, and business loans.
Changes likely to dash hopes for those seeking lower rates
Still, some changes are expected, which will disappoint those hoping for lower borrowing costs: The Fed is likely to drop language that suggests its next move will be a rate cut, and instead adopt wording that is more neutral. Several Fed policymakers in recent weeks have said that the Fed’s most likely next move is a hike, rather than a cut.
The central bank is also scheduled to release its quarterly economic projections, which include forecasts for how the Fed’s key rate will change over the next three years, on Wednesday. In March, those projections suggested the Fed would cut its rate once this year. Yet on Wednesday they will likely show no change in 2026, with maybe one or two cuts next year, economists say.
Warsh has criticized the projections for providing too much “forward guidance” to financial markets and leading Fed officials to stand by their forecasts for too long, even as the economy changes. Fed watchers will look closely to see if Warsh participates in the quarterly projections. If he doesn’t submit his own forecasts, it could be a sign he will seek to get rid of them entirely in the coming months.
Warsh to bring a new approach to Fed leadership
Outside of policy, Warsh is expected to bring a different style to the Fed than Powell, according to people who’ve worked with him. He wants Fed policymakers to give fewer speeches, have more debates behind closed doors and will likely avoid commenting on the daily ups and downs of the economy. Powell was relatively plainspoken and straightforward, while Warsh has suggested he sees the famously oracular Alan Greenspan, the Fed’s chair from 1987 to 2005, as a model.
“He’s just going to say less, because he doesn’t find that stuff very helpful,” said Robert Tetlow, a former senior policy adviser at the Fed.
Randall Kroszner, an economist at the University of Chicago who served on the Fed’s governing board from 2006 to 2009, when Warsh was also a governor, said the new chair would likely focus on bigger-picture questions, such as how AI will impact the economy. He will avoid thornier issues, such as whether tariffs raise inflation, which Powell was willing to address.
By avoiding such hot-button issues, the Fed could attract less negative attention from the White House, Kroszner said.
“He’s going to stay away from those,” Kroszner added. “If the Fed is to maintain its independence, it needs to maintain its focus.”
While seeking Trump’s nomination, Warsh called for “regime change” at the Fed and criticized the central bank for not preventing the 2021-22 inflation surge, when prices jumped 9.1% in a year, the biggest spike in four decades.
Yet Kroszner said Warsh will likely to seek to build consensus around changing things like the Fed’s communications policies, rather than imposing them. So far, former Fed officials say he hasn’t sought to fire top staff.
“He’s not there to break things,” Kroszner said.
During his Senate confirmation hearing in April, Warsh said he would focus on quelling inflation.
“Inflation is a choice, and the Fed must take responsibility for it,” he said then.
If he acts on that sentiment by keeping rates unchanged — or even raising them — Trump could end up disappointed in another Fed chair. He often threatened to fire Powell, whom he also appointed, for not cutting rates deeply enough.
“There’s at least a risk here that six months down the road, Trump is fulminating about how he didn’t get what he wanted from Warsh, and he’d like to fire Warsh,” English said.
The central bank’s increase in the uncollateralised overnight rate, by a quarter of a percentage point from 0.75%, puts it at a three-decade high.
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The Bank of Japan has been trying to normalise monetary policy lately after decades of keeping interest rates near or below zero. It adopted ultralow rates to try to encourage more borrowing and spending to counter deflation and pull the economy out of the doldrums.
Inflationary pressures because of the war in Iran, which has sent oil prices soaring in recent months, have hit Japan hard since it imports almost all its oil and gas.
Low interest rates had added to pressures on the Japanese yen, which has fallen lately to about 160 yen to the US dollar.
BOJ Gov. Kazuo Ueda, who has been hospitalised recently, did not attend Tuesday’s policy board meeting. Deputy Gov. Shinichi Uchida was expected to take his place at the news conference set for later in the day.
Before the BOJ decision, Tokyo’s benchmark Nikkei 225 index briefly topped 70,000 early Tuesday before giving up some of those early gains.
Weekly insights and analysis on the latest developments in military technology, strategy, and foreign policy.
Yesterday, TWZ published an analysis of a thermal image purportedly showing a previously unseen advanced aircraft design, which appears to be a precursor to the U.S. Air Force’s forthcoming F-47 fighter from Boeing. The image, which went viral online and is from a video that has now been released, is said to have been captured near the U.S. military’s secretive Groom Lake test base, better known as Area 51. It turns out, as a number of our readers have pointed out, there may be some interesting similarities between this secret aircraft and a “Christmas tree” fighter design concept crafted decades ago by Darold Cummings, one of the top minds behind Northrop’s YF-23 Black Widow.
You can find our full initial assessment of what we may be seeing in the viral image, first posted online by the Project Fear YouTube channel earlier this week, here. What we saw initially, as shown below, appeared to feature what could be described as a “double arrowhead” profile to its forward fuselage. This is a very distinct design cue, but it could also be a result of the low quality of the image and the artifacts that come with consumer-grade thermal imagers, which was what the aircraft was recorded with.
A close-up look at what is visible in the viral thermal image. Capture via Project Fear
Project Fear has now released the full video it says it captured near Area 51, seen below, and it underscores the aforementioned points about image quality. So, it is possible the aircraft has a more traditional low-observable ‘shovel nose,’ instead. Nonetheless, the Christmas tree fighter is an interesting trip down lesser-known fighter development memory lane that is worth examining, in particular what such a unique nose configuration would provide an advanced fighter aircraft.
The full clip of the mysterious aircraft passing by starts at around 49:34 in the runtime of the video below if it does not automatically start playing at that point.
We Filmed a Top Secret Craft Flying at Area 51
People are asking why it would be running a very bright light. Multiple reasons, could have had an emergency for all we know. But most likely, would be to keep its silhouette from being seen from certain aspects from the ground. Bright lights are established practice for… https://t.co/mxEvG2EUkz
“I was hired by Bob Sandusky in 1982 to be the Chief Configurator for the Northrop ATF [Advanced Tactical Fighter] program (YF-23). In early 1983 Bob said that Northrop had tried to develop a ‘4-spike’ (like the B-2) fighter, but it couldn’t be done, since a flying wing fighter was not possible,” Cummings wrote in his post on LinkedIn. “I told him I could design one, and he said to give it a try. The only way to accomplish this was with a series of highly swept (55 degree) surfaces over the entire length of the aircraft. The result was the DP-21, created in June of 1983.”
“4-spike” here essentially refers to the total number of radar cross-section hot-spots and where they are located, each pointing in a different direction in azimuth. The fewer ‘spikes’ a low-observable (stealthy) aircraft has, the easier it is to manage its radar signature, and to make it harder to detect and lock onto, but it’s also where those spikes are located that matter.
The blueprint of the DP-21 “Christmas Tree” fighter concept. Darold Cummings
A four-spike design like the B-2 critically has nothing from the head-on aspect, as well as from the rear, which helps immensely with survivability. These are the most critical signature areas, especially the front as the aircraft is heading into hostile territory. Also, because these are located along the path of flight, these spikes can stay consistent on a threat radar as the aircraft moves directly toward or away from the sensor, and are not fleeting in nature like those from the side. So a four spike aircraft would be very attractive for a tactical fighter meant to persist in contested territory.
“I never considered this to be a serious contender for the ATF program, as the aircraft was unstable beyond 10 degrees angle of attack!” he also noted.
“Back in 1983, the ‘Christmas Tree’ DP-21 would have been difficult to fly. However, with modern flight control systems, this design could be controlled, even at high angle of attack,” Cummings told TWZ directly today after we reached out for more information. “Low observability is always better served with long edges on the design, so the small arrow-shaped foreplane is not ideal, but it still has low RCS characteristics, just not the optimum.”
“Wing shaping is always a trade-off for maximizing LO. Most of the trades have to do with the leading edge contour, which is a large contributor to signature,” he continued. “The canard has to be designed to be ‘ported’ during penetration, as this minimizes the signature. On the YF-23, the V-Tail was ‘ported’ in penetration for the same reason. This is certainly possible with modern flight control systems.”
“Ported” in this instance refers to keeping the control surface locked in the same geometric plane as the wing while cruising.
A top-down look at the YF-23 during a flight test. USAF
We also asked Cummings directly whether it was possible his DP-21 concept had an influence on what is seen in the viral thermal image, assuming it is authentic. And we asked for his take on what impacts Boeing’s experimental X-36 and Bird of Prey designs may have had on the F-47, as well.
“My DP-21 aircraft image has been available publicly for quite some time, so it is possible it had some influence, but that is only speculation on my part,” he told us. “I believe the X-36 and Bird of Prey have both influenced the F-47 design. I have always been impressed by the X-36, as it seemed to be ahead of its time.”
Boeing’s X-36 demonstrator. NASA/Carla Thomas Boeing’s Bird of Prey. USAF
“The Groom Lake images are truly intriguing,” he also noted. “It is a viable concept.”
“I think the main thing to remember is that NO ONE thought a 4-spike design (like the B-2) was possible, and my DP-21 was an example of how it was possible,” he added. “A 4-spike design for the F-47 would truly be impressive!”
“The image shows an exotic design by any interpretation. The aft-set lambda-type wings appear to have a camber and wingtip droop, as on the Boeing Bird of Prey demonstrator. There are very large canard foreplanes — a feature that appears prominently on F-47 renderings and which we have written in detail about in the past. The broad nose, too, is something that has been included in depictions of the F-47, although we have really no idea to what degree these are based in reality. It’s worth noting that in this new thermal image, it has a distinctive double-arrowhead shape, tapering in again in front of the canards. Even the canards themselves may have more than one plane, with the outer tips being drooped, matching similar architecture as the wing. The fuselage then tapers down in the center before the wing roots begin.”
“The aircraft is very likely to be tailless, a feature common to most sixth-generation concepts seen so far. However, since it’s seen from below, we cannot be sure about this aspect of its configuration.”
“As for the powerplant, it is most likely a twin-engine design, like the F-47, a theory reinforced by the sawtooth-type trailing edge. There is no obvious suggestion of any exhaust plumes, which seems odd, but that could be the result of the sensor being used in combination with the aircraft’s power setting at the time of recording, as well as general thermal signature reduction capabilities that are part of the design.”
Beyond the nose end, there are still some very broad similarities in the shaping of the wing and main body of the aircraft seen in the footage and Cummings’ DP-21 concept.
As we noted yesterday, what is seen in the viral thermal image could be unrelated entirely to the F-47. The Navy has also been pursuing a carrier-based sixth-generation fighter, commonly referred to as F/A-XX, in recent years. There has been at least some crossover between F/A-XX and the Air Force’s NGAD effort. A rendering Boeing has shared of its proposed F/A-XX design looks very much in line with what has been shown of F-47 to date. Northrop Grumman is the other company currently competing to build the Navy’s sixth-generation carrier fighter, and has released its own renderings.
Boeing’s F/A-XX render. Boeing
In addition, it should be said that official F-47 and F/A-XX renderings released to date will have been carefully manipulated to maximize security of the programs, both of which remain highly classified, and to provide disinformation to adversaries.
As an aside, Darold Cummings also shared his take on a prospective navalized version of the F-47 in a separate post on LinkedIn last year. At that time he wrote:
“I received a DM asking if I had envisioned a Navy version of my recent F-47 fighter concept, such as the F-35A to F-35C approach. I recently completed my F-47 Navy version, which I call the F-47N. However, the approach I took was somewhat different: The F-35C used a larger wing for low speed lift, whereas I used my original F-47 wing planform, and added a canard for more low speed lift and control. The canard design (inspired by the X-36), coupled with the Multi-Axis Thrust Vectoring (inspired by the X-44), provided a very reasonable first cut at a Navy version. In general, a canard layout has been treated as adding more radar signature to a fighter. However, on the YF-23 we found that if the all-moving surface (it was a V-tail on the YF-23) was kept “ported”, in this case aligned with the wing plane during cruise, the impact on LO was not a large impediment to signature reduction. The ability to keep the canard ported is achievable using thrust vectoring for trim in cruise and penetration modes.”
Cummings’ interpretation of the F-47 design at that time notably did not reflect his previous DP-21 concept. The X-44 design he mentioned is also known as the Multi-Axis No-Tail Aircraft (MANTA), and was derived from F-22. At least to our knowledge, the MANTA never came to be. The designation was recycled for an entirely unrelated flying wing-type drone, the existence of which was first reported by TWZ.
Darold Cummings’ drawing of his notional “F-47N.” Darold CummingsRenderings of the X-44A MANTA. Lockheed Martin/NASA
It’s also worth noting that the design in the newly emerged thermal video could be tied to one of many other programs, including uncrewed ones. Still, it is very much in line with what we would expect to see from a design related to the F-47 and it seems very likely this is the Boeing NGAD demonstrator, if the video is indeed authentic, which it appears to be.
It would be nice to say that we will have to wait and see whether this aircraft turns out to have a more traditional shovel-shaped nose, or even a mild Christmas tree-like design, but we may never see it again. Hopefully that is not the case, especially after the F-47 goes public, but the final design will have significant differences from its technology demonstrator forebears.
Special thanks to @ElectroFluidSys on X for bringing Darold Cummings’ posts on LinkedIn to our attention.
