Federal Reserve Chair Kevin Warsh signals hawkish stance at ECB forum

Kevin Warsh, who became Federal Reserve Chair in May 2026, made his first appearance on the global central‑banking stage at the European Central Bank’s Forum in Sintra, Portugal on July 1. He reaffirmed the Fed’s commitment to a 2 % inflation target and warned that prices remain too high, offering no forward guidance ahead of the late‑July policy meeting. Market participants have been pricing a possible rate increase from about 3.6 % to 3.9 % by September, and Warsh’s restraint effectively leaves those expectations unchanged.

Warsh also stressed the importance of central‑bank independence, noting the political pressure his predecessor faced from President Trump and criticism over the Fed’s response to post‑COVID inflation. Scholars cited the recent Supreme Court case Trump v. Cook, which rejected an attempt to remove a Fed governor, as a reminder of the legal boundaries protecting the Fed’s autonomy. The same commentary highlighted calls for reforms, including separating the Fed’s monetary‑policy and regulatory functions and adopting a clearer, rule‑based decision framework to improve accountability and focus on price stability.