Kevin Warsh’s Fed debut shows split over inflation and AI‑driven price pressures

Kevin Warsh, appointed by Donald Trump, chaired his first Federal Reserve Open Market Committee meeting on 16‑17 June 2026. The committee voted unanimously to keep the federal funds rate in the 3.5 %‑3.75 % range, but the released minutes reveal a deep divide among members.

Several participants warned that inflation remains well above the Fed’s 2 % target, citing strong artificial‑intelligence demand, Middle‑East conflict‑related energy price spikes and tariff effects as upside risks. One faction argued that the current rate range does little to curb price pressures and signaled support for at least one more hike in 2026; nine of the 18 voting members projected a 25‑basis‑point increase, and six saw a second hike. Another group believed inflation could ease, allowing rates to stay steady or even fall.

Warsh eliminated forward guidance, issuing a brief post‑meeting statement and proposing new working groups on communication, balance‑sheet policy, data usage and productivity. Market pricing reflected the split, with prediction‑market odds of a rate hike rising to 59‑79 % for the year. President Trump continues to press for lower rates, adding political pressure to the policy debate.