Kevin Warsh has a message for anyone who thinks the Federal Reserve is sitting on its hands: holding rates steady is not the same as doing nothing.
The Fed Chairman, who took the reins in May 2026, defended the FOMC’s decision to keep the federal funds rate parked in the 3.5%-3.75% range at its July 29 meeting. The vote wasn’t unanimous, though. A 9-3 split saw three officials push for an outright rate hike, a sign that even inside the Fed, patience is wearing thin.
Five years of above-target inflation will do that
Inflation has been running above the Fed’s 2% target for more than five years now. The culprits are familiar at this point: supply shocks, geopolitical tensions in the Middle East, and a massive surge in demand fueled by the AI investment boom.
Warsh acknowledged as much, noting that the persistent inflationary pressures of the past half-decade can’t be fixed with short-term measures.
