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Federal Reserve expected to keep rates unchanged as Warsh faces questions on inflation
Federal Reserve Chair Kevin Warsh is expected to provide fresh clues on the direction of U.S. monetary policy on Wednesday afternoon.
JESSICA A. BOTELHO | The National News Desk · KTUL2
by JESSICA A. BOTELHO | The National News Desk
Federal Reserve Chairman Kevin Warsh testifies before the Senate Banking, Housing and Urban Affairs Committee to deliver the semiannual monetary policy report to congress, on Capitol Hill, Wednesday, July 15, 2026, in Washington. (AP Photo/Jose Luis Magana)
Federal Reserve Chair Kevin Warsh is expected to provide fresh clues on the direction of U.S. monetary policy on Wednesday afternoon following the Federal Open Market Committee's (FOMC) latest interest rate decision.
Federal Reserve Chairman Kevin Warsh testifies before the Senate Banking, Housing and Urban Affairs Committee to deliver the semiannual monetary policy report to congress, on Capitol Hill, Wednesday, July 15, 2026, in Washington. (AP Photo/Jose Luis Magana)df
Meeting in Washington Tuesday and Wednesday, the Fed will likely keep its benchmark interest rate unchanged. Members of the central bank’s rate-setting committee may not be so reluctant to act when they gather again next Sept. 15-16.
Warsh, who became Fed chair in May, has emphasized the central bank's commitment to returning inflation to its 2% target, while maintaining the Fed's independence from political pressure. His public comments have reinforced a hawkish stance on inflation, though analysts remain divided over whether the next rate move will come later this year.
Investors are expected to focus on Warsh's assessment of inflation, the labor market, and the economic impact of higher energy prices stemming from the conflict with Iran.
After the U.S. and Israel attacks on Feb. 28, Iran shut down the Strait of Hormuz -- through which a fifth of the world’s oil and natural gas pass. That caused the greatest disruption in oil supplies in history and sent energy prices surging. They’ve since bobbed up and down depending on the ever-changing state of the conflict and negotiations to de-escalate it, but the average cost for a barrel is $10 to $15 more today than it was at this point last year.
The Fed's decision and Warsh's remarks are expected to influence financial markets, mortgage rates, and borrowing costs for consumers and businesses as policymakers continue balancing inflation risks with concerns about economic growth.
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EDITOR'S NOTE: The Associated Press contributed to this report.