US Federal Reserve Chair Kevin Warsh has reaffirmed the central bank’s strong commitment to achieving its 2% inflation target, emphasizing price stability as the institution’s top priority during his first press conference in the role.
Speaking after the Federal Open Market Committee’s latest policy meeting, Warsh said the Fed possesses both the capability and determination to bring inflation back to its long-term objective. He stressed that restoring price stability remains the core focus of policymakers.
The committee unanimously voted to keep the federal funds rate unchanged in the range of 3.5% to 3.75%, maintaining its current stance in support of its dual mandate of stable prices and maximum employment.
Warsh noted that the US economy continues to expand at a steady pace despite global uncertainties, including geopolitical tensions. He pointed to solid productivity growth, strong capital investment, and stable labor market conditions as signs of economic resilience.
However, he acknowledged that inflation has remained above the Fed’s target for an extended period, describing persistently high prices as a burden on households. He reiterated that the committee remains fully aligned on the goal of restoring price stability.
The Fed also released updated projections indicating that interest rates could rise slightly by the end of 2026, while Warsh confirmed he did not contribute to the latest dot plot due to concerns about its structure and interpretation.
In a notable shift, the central bank removed forward guidance from its policy statement. Warsh said the revised communication approach was intended to be more direct and factual, avoiding signals about future rate decisions.
He also announced the formation of several internal task forces focused on key policy areas, including communications strategy, balance sheet management, economic data analysis, labor productivity, and inflation frameworks.
Warsh emphasized that policy decisions are made collectively by the committee, dismissing suggestions that the Fed should have tightened rates further at this stage. He added that monetary policy will be reassessed at the next meeting in six weeks.
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