A new man is in charge of the world's most powerful central bank. Here's what it means for the Rand.

Who is Kevin Warsh?

On 22 May 2026, Kevin Warsh was sworn in as the Chair of the United States Federal Reserve - the most powerful central banking position in the world. He replaced Jerome Powell, whose eight-year tenure ended in a political standoff with the Trump administration.

On 16 and 17 June, Warsh will chair his first Federal Open Market Committee meeting. That is the group that sets US interest rates. And what they decide — or even how they talk about what they might decide - will influence the direction of the Rand.

Not because South Africa has any say in it. But because that's how the global currency system works. And if you are importing goods, paying an overseas supplier, or receiving a foreign payment, you need to understand the mechanism before it hits your margin.

The decision itself is almost certainly a hold.

Markets are pricing in a 97% probability that Warsh leaves rates unchanged at the 16-17 June meeting. The current Fed funds rate sits at 3.50% to 3.75%, where it has been for three consecutive meetings.

With US inflation still running at 3.8% year-on-year - well above the Fed’s 2% target - and oil prices spiking again on the back of the Middle East situation, cutting rates would be a difficult call to justify. Warsh is not expected to make it.

So if the decision is a hold, why does it matter?

Because the decision is almost beside the point. What matters is the language Warsh uses - and what the Fed’s updated economic projections signal about where rates are heading for the rest of 2026.

What is the dot plot - and why does it matter for the rand?

The dot plot is a chart. Each member of the Federal Reserve puts a dot on it showing where they expect interest rates to be at the end of each year. When you add up all the dots, you get a picture of where the world’s most powerful central bank thinks interest rates in the US are going.

Under Jerome Powell, the dot plot was a regular feature of every meeting. Markets built their expectations around it. For businesses in Johannesburg paying a supplier in Shanghai, that predictability mattered. When the Fed was readable, so was the rand.

Here’s the problem: Warsh has been publicly critical of the dot plot. He has argued that forward guidance - telling markets what you plan to do in advance - ties the Fed’s hands and reduces its flexibility. He may change how the Fed communicates its outlook entirely.

For emerging market currencies like the Rand, that uncertainty matters. When the Fed is predictable, investors can plan. When the new chair is an unknown quantity with a mandate to do things differently, investors pull back from risk - and the Rand is a risk asset.

What makes Warsh different - and why the hawkish label matters.

Warsh is widely described as hawkish. In central banking language, that means he leans toward keeping rates higher for longer to control inflation, rather than cutting quickly to stimulate growth.

For South African importers and exporters, a hawkish Fed chair has a specific consequence: a stronger US dollar. When US rates stay elevated, global investors move money into dollar-denominated assets to earn that higher return. Demand for dollars goes up. The Rand - like most emerging market currencies - comes under pressure.

We have already seen this dynamic play out in 2026. When the Iran war broke out in February and oil spiked, inflation expectations in the US jumped. Rate cut expectations that were priced in for early 2026 evaporated almost overnight. The Rand went from R15.72 at its January high to over R17.20 at its worst point in March.

With a more robust labour market that anticipated and the Straight of Hormuz still technically closed causing oil prices to remain elevated (pointing to inflationary pressures). It is expected that the US Fed may take a wait and see approach at this point. 

What SA businesses should watch for this week.

There are three things worth watching when the Fed announcement comes through on Wednesday evening.

The rate decision itself. Expected to be a hold - but any surprise move would be significant.

The dot plot. Does Warsh publish it at all? Does it show more hikes or fewer cuts than Powell’s last projection? If he scraps it entirely, that’s the story.

The press conference tone. Warsh’s first public statement as chair will tell markets a great deal about how he plans to run the Fed. Hawkish language will strengthen the dollar and pressure the Rand. Markets will be listening to every word.

The Rand is sitting around R16.20 to the dollar as this week opens. With oil prices coming off on ceasefire deals out of the Middle East, and the Fed decision landing mid-week, the current Rand strength could be presenting an opportunity for importers to hedge some future foreign payments.

I’ve been watching Fed decisions move the Rand for over 20 years. The ones to watch aren’t the decisions themselves - it’s the press conferences after. When a new chair sits down for their first Q&A, they reveal a lot about how they plan to run the next four years.

Warsh has a reputation for saying less rather than more. He has also been vocal about wanting to change how the Fed operates. That combination - a new chair, a new communication style, and markets that still don’t know what to expect from him - is enough to keep markets on edge this week. You don’t need an interest rate change for the Rand to move. You just need uncertainty.

The one question to ask yourself before Thursday morning.

If the Rand moves R0.50 in either direction after the Fed announcement - which is entirely possible - how does that affect your next import order or foreign payment?

If you don’t have a clear answer, it’s worth having a conversation before Wednesday night.

Locking in a rate now is not speculation. It’s planning.