Fed Chair Kevin Warsh says data will guide interest-rate policy
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New Federal Reserve chair Kevin Warsh indicated that the central bank will base future rate decisions on economic data, maintaining the current stance amid ongoing inflation pressures.
Kevin Warsh, who was confirmed as chair of the Federal Reserve this week, held short-term interest rates steady at his first Federal Open Market Committee (FOMC) meeting. In a brief press conference, he said the Fed will let incoming economic data determine the path of monetary policy rather than adhering to any predetermined schedule or political pressure.
Warsh, a former Fed governor and academic known for a hawkish stance on inflation, reiterated the Fed’s commitment to its 2% inflation target. He noted that recent developments, including a de-escalation of the conflict in Iran and potential improvements in productivity, could influence future energy prices and overall price pressures.
"Our policy decisions will be data-driven," Warsh said, adding that the central bank will remain flexible and ready to adjust rates if inflation does not move closer to the target.
The new chair also signaled a willingness to reduce the Fed’s balance sheet, a move consistent with his long-standing view that the central bank should focus on price stability rather than providing extensive forward guidance to markets. Analysts will watch upcoming economic releases to gauge whether the Fed may consider further policy adjustments in September.