Central Bankers Find Common Ground with New Fed Chair in Sintra

In a significant development for global monetary policy, the world’s central bankers have found an unlikely ally in the new Federal Reserve Chair, Kevin Warsh. At the European Central Bank’s annual gathering in Sintra, Portugal, Warsh held private meetings with counterparts from Europe and beyond, signaling a renewed commitment to international cooperation.

According to sources familiar with the discussions, the conversations remained largely high-level, focusing on broad themes such as inflation trends, shadow-banking risks, and international policy coordination. However, officials interpreted Warsh’s outreach as a sign that the Fed would stay engaged on the global stage, easing fears of a retreat from the international forums that anchor central bank cooperation.

The stakes are high for the Federal Reserve, as it remains the ultimate provider of dollar liquidity in times of financial stress and the custodian of a substantial share of several countries’ gold reserves. As the most influential voice in global debates on monetary policy and financial regulation, policymakers arrived in Sintra keen to gauge whether the close working relationships many had enjoyed with former Fed Chair Jerome Powell would survive the transition.

Several central bankers who have known Warsh since his time as a Fed governor between 2006 and 2011, or through his later involvement in the Group of Thirty consultative body, said they recognised the same policymaker they had dealt with for years. Others cautioned it was too soon to judge how he would perform once in office as he navigates the competing demands of preserving his credibility and managing pressure from the White House.

Warsh’s reception was notable, as many attendees had previously closed ranks around Powell during his prolonged clash with Trump. What might have been an awkward debut instead took on some of the characteristics of a central-bankers’ love-in. ECB President Christine Lagarde set the tone at the conference’s opening dinner, greeting the late-arriving Warsh with air kisses and publicly expressing her desire to work closely together.

Warsh replied with gestures of his own, chatting with some French participants in their own language and circulating among governors at Tuesday’s informal dinner. Speaking on a panel alongside ECB President Lagarde, Bank of England Governor Andrew Bailey, and Bank of Canada Governor Tiff Macklem, Warsh struck a markedly collegial tone, saying he was