WASHINGTON (AP) — Federal Reserve Chair Kevin Warsh declared Wednesday that the nation’s central bank will maintain its independence and work to drive down inflation — a stance that likely rules out the interest rate cuts President Donald Trump has repeatedly pushed for.
Speaking at a central bank conference in Sintra, Portugal, Warsh addressed concerns about whether the Fed might allow inflation to run above its 2% target. Anyone hoping for that, he said, would be let down.
“I guess they’d be disappointed. We’re going to deliver price stability,” Warsh told attendees.
The Federal Reserve’s traditional tool for fighting inflation is raising borrowing costs — the opposite of what Trump has been calling for. When the question of the president’s desire for lower rates came up, Warsh firmly defended the Fed’s separation from political influence.
“We’ve been an independent central bank for a very long time,” he said. “We’re going to be an independent central bank at this moment and you’re going to see no changes to that.”
These statements mark a notable shift for Warsh, who took over as Fed chair from Jerome Powell on May 22. During his informal push to land the top job last year, Warsh had advocated for lower rates. Since stepping into the role, however, he has pivoted toward prioritizing inflation control.
Warsh also declined Wednesday to lay out specific steps the Fed plans to take — in keeping with his resistance to so-called “forward guidance,” the practice of hinting at future policy decisions.
“The tactics, the strategy, and the rest, that’s still to come,” he said.
At his first news conference last month, Warsh similarly stressed the importance of returning inflation to its target level. Financial markets are currently pricing in the possibility that the Fed could lift its benchmark interest rate from its current level of around 3.6% to approximately 3.9% as soon as September.
