Kevin Warsh testifies before committee, addressing inflation and maintaining independence from Donald Trump.
Federal Reserve Chair Kevin Warsh appeared before the House Financial Services Committee to address inflation and the central bank’s policy future. Warsh stressed the Fed’s commitment to independence, stating he would resist any political pressure from Donald Trump. Despite downplaying positive inflation reports, Warsh noted that high-tech spending, driven by AI infrastructure, continues to create upward price pressure on goods. When questioned by Senator John Kennedy regarding how the Fed determines if inflation is temporary or permanent, Warsh indicated the process involves several task forces reviewing data sources. The testimony also addressed the scope of central bank authority, particularly in light of soaring costs for computing chips cited by major technology firms. Warsh emphasized that while data trends are informative, they are "imperfect measures." Separately, when asked about his communications with Donald Trump, Warsh declined to comment on specific discussions. Meanwhile, reports noted that the administration has historically scrutinized the Fed’s independence, though Warsh reaffirmed his intention to act according to established monetary standards.