Federal Reserve Chairman Kevin Warsh taps Daniel Covitz and Eric Engstrom as advisers

Kevin Warsh, the new Federal Reserve Chairman, has selected Daniel Covitz and Eric Engstrom as his advisers, pulling two deeply embedded economists from within the central bank’s own ranks.

Covitz currently serves as Deputy Director in the Program Direction Section of Research and Statistics at the Federal Reserve Board. Engstrom holds the title of Associate Director in the Program Direction Section of Monetary Affairs.

Why these two matter

Covitz brings deep expertise in credit markets and asset bubbles. Engstrom focuses on inflation dynamics and what economists call “macro-financial linkages,” studying how financial markets and the broader economy interact. His positioning in Monetary Affairs puts him at the nexus of interest rate decisions and their downstream effects.

The two aren’t strangers to collaboration. Covitz and Engstrom co-authored a FEDS Note on February 12, 2026, analyzing the recent surge in far-forward nominal Treasury rates. That paper examined why investors are demanding higher yields on long-dated government bonds, a question that sits at the heart of current monetary policy debates.

A chairman who prefers familiar faces

Warsh’s relationship with both economists reportedly stretches back years. Historical references suggest he’s commended their contributions as far back as 2009, when he served as a Fed Governor during the financial crisis.

Warsh’s chairmanship itself represents a meaningful leadership shift at the central bank. His stated priorities center on monetary policy, interest rates, and financial stability, a trio of concerns that aligns neatly with the combined expertise of his two new advisers. Covitz covers the financial stability angle. Engstrom covers inflation and rates.

What this means for investors

Fixed income markets should pay particular attention to the Covitz-Engstrom FEDS Note on far-forward Treasury rates. That paper’s existence tells you where the new chairman’s analytical gaze is focused. When the Fed Chair’s closest advisers are publishing research on why long-term bond yields are climbing, it’s reasonable to expect that topic will feature prominently in future policy discussions and potentially in forward guidance.

Engstrom’s specialization in inflation dynamics suggests the Fed under Warsh won’t be cavalier about price stability. His expertise in macro-financial linkages means he’s likely to push for a holistic view of economic conditions, one that doesn’t treat labor markets, asset prices, and consumer inflation as separate conversations.

Traders and institutional investors should track future publications from both advisers. The FEDS Notes system functions as a preview channel for the analytical work that eventually shapes FOMC decisions. Covitz and Engstrom will likely continue publishing, and their papers will now carry the implicit endorsement of the chairman’s office.

Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.