Kevin Warsh spent years criticizing the Federal Reserve from the outside. Now he’s running it, and the view from the inside looks a lot less comfortable.
Three months into his tenure as Fed Chair, Warsh finds himself caught between persistent inflation running above 3%, a president who wants lower interest rates, and a market that’s already pricing in a rate hike at the September FOMC meeting. Bloomberg’s John Authers has a name for this predicament: a rates trap.
The trap takes shape
Warsh was sworn in on May 22, 2026, bringing with him a hawkish reputation forged during years of public commentary about the Fed’s missteps. He had repeatedly blamed the central bank’s flexible average inflation targeting framework, adopted in 2020, as a policy error that let price pressures build unchecked.
July 2026 inflation readings showed both headline and core measures running above 3%, well north of the Fed’s 2% target. That marks roughly 65 months of elevated inflation by Warsh’s own count, a figure he cited publicly while insisting the Fed still has “work to do” to restore price stability.
