Federal Reserve Chair Kevin Warsh told Congress on July 14 that the government’s go-to inflation numbers don’t actually tell you what inflation is doing.
During his testimony, Warsh pointed to June 2026 CPI data showing headline inflation at 3.5% year-over-year, down from 4.2% in May. Core inflation, which strips out food and energy, fell to 2.6% from 2.9%. On paper, that looks like progress. Warsh’s message: don’t trust the paper.
The measurement problem
The standard inflation metrics most investors watch, like core CPI and the Personal Consumption Expenditures index, lump together every price change in the economy. A one-time tariff spike on electronics gets treated the same as a sustained increase in rent. Traditional metrics don’t distinguish between the two.
During his Senate confirmation hearing earlier in 2026, Warsh told lawmakers that “the data that’s being used to judge inflation is quite imperfect.” Now that he’s actually running the Fed, he’s doing something about it.
