Hot jobs report puts Fed cuts further out of reach as Chair Warsh faces policy tests

Key points

• New Chairman of the Federal Reserve Kevin Warsh arrives during a swearing in ceremony in the East Room of the White House in Washington, DC on May 22, 2026. Aaron Schwartz | Afp | Getty Images Another big jobs report in May has pretty much swept aside the possibility of interest rate cuts anytime soon — and in the process underscored the tricky policy path ahead for new Federal Reserve Chair Kevin Warsh.
• The chance of rate reductions already had been on life support heading into Friday's nonfarm payrolls report.
• But the unexpectedly strong gain of 172,000, compounded by sharp upward revisions for prior months, makes the case for policy easing even weaker, particularly considering the elevated level of inflation and uncertainty over the Iran war.
• "If I'm at the [Fed], I say, 'look, job growth is good, there's no need for us to support the labor market.