Fed Chairman Kevin Warsh Vows to Keep Fighting Inflation as White House Rejects Case for Rate Hike

Federal Reserve Chairman Kevin Warsh used his first congressional hearing since taking office to reaffirm the central bank’s commitment to restoring price stability.

Appearing before the House Financial Services Committee on July 14, Warsh said Fed officials would not accept inflation remaining persistently high.

“The surge in inflation over the past five years will become a thing of the past,” Warsh said, according to the report.

His testimony came as newly released June inflation data showed consumer prices rising 3.5% from a year earlier. That was below the reported 3.8% market forecast and down from 4.2% in May.

Warsh Warns Against Declaring Victory

Despite the improvement, Warsh cautioned against drawing broad conclusions from a single inflation report.

He noted that more recent risks, including renewed military tensions involving the United States and Iran, were not reflected in the June figures and could still place upward pressure on prices.

“I do not want to become overly relieved or overly concerned because of one data release,” Warsh said. “Some may say the mission is accomplished and everything is fine. I do not think that.”

Warsh described true price stability as an environment in which ordinary Americans no longer need to constantly worry about inflation. He linked that goal to lower long-term Treasury yields and reduced mortgage burdens for American families.

No Clear Signal on the Fed’s Next Move

Warsh did not say whether the Federal Reserve was preparing to raise, cut, or hold interest rates. According to the report, his cautious approach reflects an effort to avoid giving financial markets advance guidance that could limit the Fed’s options.

He also defended the principle of Federal Reserve independence when questioned about possible political pressure from President Donald Trump.

“I will continue doing my job,” Warsh said, adding that the Federal Reserve remains independent.

White House Says Rate Hike Is Not Justified

White House National Economic Council Director Kevin Hassett offered a more direct assessment, saying recent economic data does not support another interest-rate increase.

Hassett said he believes Warsh will guide the Federal Reserve toward the correct decision on rates. He also argued that the threat posed by Iran to the global economy has declined.

The latest inflation report gives the Fed more breathing room, but Warsh’s testimony made clear that the fight against high prices is not over. The central bank now faces the challenge of controlling inflation without placing unnecessary pressure on American workers, homeowners, and businesses.