Fed Chair Kevin Warsh vows independence and price stability, signaling no rate cuts for Trump despite Wall Street eyeing a September hike.
New Federal Reserve Chair Kevin Warsh said Wednesday that the central bank will stay independent of the White House and stay focused on pushing inflation back down, a stance that appears to rule out the interest rate cuts President Donald Trump has been pressing for.
At a Glance
- Warsh spoke at a central bank conference in Sintra, Portugal
- He pledged the Fed would deliver price stability and reject inflation above 2%
- Warsh replaced Jerome Powell as Fed chair on May 22
- He had called for lower rates last year while seeking the chair job
- Wall Street expects a possible rate hike as soon as September, from about 3.6% to roughly 3.9%
Warsh Draws a Line on Independence
Speaking at the conference, Warsh made clear that anyone hoping the Fed would tolerate elevated inflation should think again. Asked whether businesses or households might expect the central bank to accept price increases above its 2% target, he said, "I guess they'd be disappointed. We're going to deliver price stability."
The Fed's standard tool for fighting inflation is raising borrowing costs, which slows spending and cools price pressure. When a reporter raised Trump's repeated calls for lower rates, Warsh pushed back firmly on the idea that the White House could sway policy. "We've been an independent central bank for a very long time," he said. "We're going to be an independent central bank at this moment and you're going to see no changes to that."
A Notable Shift From His Earlier Position
Warsh's comments mark a departure from where he stood just a year ago. Before landing the chair role, he had argued publicly for lower rates, a position many saw as part of his pitch for the job. Since taking over from Jerome Powell in late May, though, his public statements have leaned the other way, toward restraining inflation rather than easing policy.
He offered no hints about the specific tools or timing the Fed might use to bring inflation down. That silence tracks with his stated skepticism of
