Fed Chairman Warsh Testifies on Inflation in First Capitol Hill Appearance

Fed Chairman Kevin Warsh told the House Financial Services Committee on July 14 that the central bank has “no tolerance” for stubbornly high inflation in his first appearance before Congress since taking office. Warsh said the Fed’s number one objective is to get monetary policy right.

He added that if policy is set correctly, the inflation surge of the last five years will become a thing of the past.

Warsh also stated that inflation is a choice largely shaped by monetary policy decisions and that the Fed possesses the tools of interest rates and its balance sheet to address it. The Bureau of Labor Statistics released its June Consumer Price Index the same morning, showing inflation slowed by its largest one-month drop since 2020.

Warsh said he does not want to overread or cherry-pick the data and rejected the view that the report signals mission accomplished.

He noted the labor market remains broadly stable. Following the data release and testimony, the probability the Fed will hold rates at its July 29 meeting rose above 83 percent, while the chance of a rate hike fell to roughly 16 percent, according to CME FedWatch. The Fed has kept its benchmark rate range at 3.5 percent to 3.75 percent since December 2025.

Warsh was nominated by President Trump in January 2026 and assumed office in late May. He pledged to remain independent even if the president publicly criticizes him. The unemployment rate stood at 4.2 percent in June, and U.S.

GDP expanded at a 2.1 percent annualized pace in the first months of the year.