A shiny new Fed Chairman will be keen to start with an interest rate cut—but the bank is growing more hawkish due to Iran

In the entirely likely event that Kevin Warsh’s nomination for Fed chairman makes it through Senate hearings, he’ll be keen to leave his first Federal Open Market Committee meeting (FOMC) this summer with a base rate cut in-hand.

After all, in order to land the nomination to succeed Jerome Powell the directive from the Oval Office was explicit: The candidate would have to be more dovish than Powell. Warsh, a former Fed Governor, fits the bill: He’s bullish on the U.S. economy, thanks in large part to the promise of AI...