Kevin Warsh has been running the Federal Reserve for less than a month, and he’s already drawn a line in the sand. At his first press conference following the June 17 FOMC meeting, Warsh delivered a phrase that’s likely to define the early months of his tenure: “Inflation is a choice.”
Holding steady, but not standing still
The FOMC voted to keep the federal funds rate at 3.5% to 3.75% at the June 16-17 meeting, Warsh’s first as chair. Inflation sits at approximately 3.8%, nearly double the Fed’s stated 2% target. Warsh made it clear that the gap between those two numbers is unacceptable. He emphasized the Fed’s commitment to what he called a “unanimous and unambiguous” 2% inflation target.
Warsh also announced the creation of five task forces to review critical areas of Fed operations, including inflation frameworks and communications strategies.
Projections from within the Fed hinted at possible rate increases ahead. Warsh reportedly favors tracking trimmed mean inflation measures rather than headline figures, a methodological shift that strips out the most volatile price swings and focuses on underlying trends.
