Fed Chair Kevin Warsh names Daniel Covitz, Eric Engstrom advisers

Federal Reserve Chairman Kevin Warsh has selected two veteran central bank economists to serve as advisers, drawing from within the institution he has pledged to reshape, according to The Wall Street Journal, which first reported the appointments.

The advisory roles will be filled by Daniel Covitz, who holds one of three deputy director positions in the Fed's research and statistics division, and Eric Engstrom, who serves as a senior associate director in monetary affairs, according to CNBC. A Fed official noted that both will serve in these advisory roles on a rotating basis while keeping their positions in their respective divisions.

Going back to Warsh's earlier stint as a Fed governor between 2006 and 2011, Covitz's name appeared in the acknowledgments of several Warsh speeches — a relationship that spans nearly 30 years of Covitz's career at the central bank, where his scholarly work has centered on credit markets and questions of financial stability. Engstrom has concentrated on monetary policy and financial market analysis, according to the Journal.

The two economists co-authored a paper this past February examining why long-term Treasury yields climbed even as the Fed cut its benchmark rate in 2024 and 2025. Their conclusion pointed to bond investors seeking a higher premium to offset concerns about fiscal deficits and the prospect of recurring supply disruptions — though the paper offered no indication that confidence in the Fed's inflation-fighting credibility had eroded, according to Reuters.

Warsh had earlier brought on two outside advisers: Paul Winfree, a former Heritage Foundation fellow who contributed to Project 2025, and Daniel Heil of Stanford University's Hoover Institution, who had previously worked with Warsh.

Five task forces covering areas including communication, data analysis, the balance sheet, inflation policy, and technology were unveiled by Warsh last week as part of a broader review of central bank operations. He indicated the groups would bring in outside expertise while also pulling from specialists already working within the institution.

Turning to veteran insiders for early advisory support is consistent with how other recent Fed chairs have approached the start of their tenures, according to the Journal.