Fed Notes: What you expect from Warsh: June FOMC survey results

Research evidence excerpt

Fed Notes: What you expect from Warsh: June FOMC survey results

Deutsche Bank

Research

Economics Date

Fed Notes 12 June 2026

What you expect from Warsh: June FOMC

Matthew Luzzetti, Ph.D. survey results

Chief US Economist

+1-212-250-6161

This note summarizes responses to our pre-FOMC investor survey. This edition

also included questions on Chair Warsh’s likely impact on the Fed. Matthew Raskin

Strategist

Responses to this survey were submitted between Mon 6/8 and Thu 6/11. +1-212-250-1741

How Warsh will impact the Fed (Figures 1-4) Amy Yang

Economist

▪ In terms of the Fed’s reaction function, respondents generally see Warsh +1-212-250-9959

as not having a revolutionary impact. On balance, the modal outcome is

for “about the same” responsiveness to inflation and labor market

conditions, as well as neutral rate. That said, any expected changes skew

dovish – about 1/3 of respondents think Warsh will make the Fed less

responsive to inflation and nearly 30% think the Fed will be more

responsive to the labor market. Views on the neutral rate are balanced.

▪ There is significant uncertainty about the timing and magnitude of

balance sheet reduction under Warsh, with the distributions of responses

across outcomes very flat. In terms of timing, the modal expectation is for

balance sheet reduction to commence in H1 2027 (37% of respondents).

In terms of magnitude, the modal outcome is “more than $1tn” (24%),

with equal shares answering “no particular view” and less than $500bn.

Taking the midpoints of the ranges, the average expectation is close to

$700bn. However, we caution that it is unclear if this reflects

expectations of outright reduction or relative to a counterfactual in which

the balance sheet continues to rise.