Fed Chair Warsh Signals Hold Preference While Avoiding Any Rate Direction Commitment
In his first semiannual testimony before Congress on July 14–15, 2026, Fed Chair Kevin Warsh held rates at 3.50–3.75%, avoided the word 'cut,' and launched five internal task forces to review Fed communications, the balance sheet, and the inflation framework itself. His remarks diverged from Governor Waller's conditional easing language delivered two days earlier, which had named September as a possible cut date, leaving the two officials publicly misaligned. Markets interpreted Warsh's testimony as modestly shifting probabilities toward a hold at the July 28–29 meeting, while his critique of the 2020 flexible average inflation targeting regime signals a potential overhaul of how the Fed defines its 2% inflation goal.