Kevin Warsh commits to restoring price stability as the new Federal Reserve chair during congressional hearings.
Kevin Warsh testified before the House and Senate this week, emphasizing his primary commitment to return inflation to the Federal Reserve's 2% target. While acknowledging that the Fed cannot directly control specific price shocks, such as those caused by the Iran war, Warsh stated that the central bank possesses powerful tools to prevent these costs from spreading across the wider economy. The administration's influence on monetary policy was a key point of discussion, with lawmakers questioning how interest rates might counter factors like tariffs and high oil prices. Warsh defended the Fed's independence, noting that he remains guided by data and the law rather than political pressure. He also addressed the impact of artificial intelligence, expressing optimism that private investment will drive long-term productivity despite potential short-term job disruptions. To refine the Fed's approach, Warsh established several task forces to analyze inflation frameworks, data sources, and the evolving role of AI in the economy.