Federal Reserve Chair Kevin Warsh is drawing a clear line between his inflation-fighting stance and the more optimistic outlook coming from New York Fed President John Williams. The divergence became impossible to ignore after Warsh’s August 28 Jackson Hole address.
Warsh, who took the helm of the Fed in mid-2026 and held his first FOMC meeting in June, has kept the federal funds rate target at 3.5% to 3.75%. His approach is aggressively data-dependent, and he has not offered Wall Street the kind of forward guidance it has grown accustomed to over the past decade.
Two Fed voices, two very different reads
Williams has characterized inflation, running at roughly 4%, as “unquestionably too high” but has simultaneously predicted it will decline.
Warsh isn’t buying it. During his July congressional testimony, he told lawmakers the Fed has “no tolerance for persistently elevated inflation.” At Jackson Hole, he went further, noting that half of the items in the Personal Consumption Expenditures index were rising above 3% annually. Core PCE inflation sat at about 3.7% year-over-year at the time of his speech.
