Refuses a July rate-cut commitment! New Fed Chair Hasher’s international debut hits back, saying “inflation is too high,” and sharply pushes back against Trump’s intervention

Since taking over the Federal Reserve (Fed) in May 2026, new Chairman Kevin Warsh has made his debut on the international stage. According to a report from CNBC today (1st), Warsh, at the ECB Central Bank Forum in Portugal, refused to reveal any hints about July's interest rate decision, only sternly stating that "inflation is still too high." Facing political pressure from the Trump administration, he vowed to defend the central bank's independence; at the same time, he highly praised ECB President Christine Lagarde for abandoning "forward guidance," signaling a major shift in the Fed's future communication strategy.
(Previous summary: Why did new Fed Chairman Warsh appoint two senior economists as advisors?)
(Background supplement: US Treasury Secretary Bessent calls out: Inflation will fall back to target! Fed Chairman Warsh will balance economic growth and price stability)

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• Rejecting Forward Guidance, Warsh Warns: Inflation Still Too High
• Unfazed by Trump's Pressure, Vows to Defend Fed's Absolute Independence
• Overview of Global Central Bank Chiefs' Views and Macroeconomic Background

As the global economy reaches a critical turning point, Kevin Warsh, who succeeded Jerome Powell as Chairman of the US Federal Reserve (Fed) in May 2026, made his international debut at the European Central Bank (ECB) Central Bank Forum held in Sintra, Portugal.

The high-profile panel discussion, hosted by renowned CNBC anchor Sara Eisen, brought together ECB President Christine Lagarde, Bank of England Governor Andrew Bailey, and Bank of Canada Governor Tiff Macklem. In the dialogue with global central bank chiefs, Warsh demonstrated a hawkish stance and communication philosophy distinctly different from his predecessor.

Rejecting Forward Guidance, Warsh Warns: Inflation Still Too High

The Fed has remained on hold so far this year, and the market is closely watching whether this month's FOMC meeting will bring any action. However, Warsh bluntly refused to reveal any clues about July's interest rate decision at the forum. He only cautiously stated that officials would engage in thorough debates in the meeting room and "chart a new course."

Despite not offering clear guidance, his stance on prices was exceptionally firm. Warsh emphasized that the Fed's primary goal remains consistent: "We are all committed to the cause of maintaining price stability. Although we are open to improvements in AI and productivity, prices are still too high right now." He even publicly praised Lagarde for opposing the practice of providing "forward guidance" to the market, joking that he "already liked her, and now loves her even more," hinting that future public statements by Fed officials will be significantly reduced, steering monetary policy back to a data-driven, low-key approach.

Unfazed by Trump's Pressure, Vows to Defend Fed's Absolute Independence

Beyond inflation, the greatest challenge Warsh faces after taking office is the immense political pressure from US President Donald Trump's administration to intervene in monetary policy. Seizing this international opportunity to speak out, Warsh issued a very firm rebuttal. He solemnly declared that the Fed has "long been an independent central bank," and that this principle has never wavered in the past and absolutely will not change during his tenure.

Overview of Global Central Bank Chiefs' Views and Macroeconomic Background

| Key Topic | | --- | Central Bank Chiefs' Views and Market Data Interpretation | | --- | --- | | Impact of AI on Monetary Policy | Fed (Warsh): AI is driving capital expenditure (demand side) and is expected to expand the supply side in the future, having a "huge impact" on monetary policy. ECB (Lagarde): Europe and the US are "mutually dependent (hostage)" in the AI field; Europe relies on top US technology, while the US needs Europe's vast market, which accounts for 25% of its revenue. | | Weakness in US Labor Market | Earlier data showed that US ADP private employment for June only increased by 98,000, far below expectations; the entire market is closely watching the official non-farm payrolls report, which is expected to show an increase of 115k. | | Divergence in Future Rate Paths | ECB: Last month's rate hike was seen as "perfectly timed" due to a rebound in core inflation; it is expected to take until the end of 2028 to achieve the 2% target. Market Forecast: Research firm TS Lombard warns that current economic conditions may force the Fed to "significantly raise rates" in the future; Warsh's task is to master the timing rather than change the final path. |

This forum not only established the new "talk less, do more" style of the Fed under Warsh but also sent a clear signal to the global market: before the inflation beast is truly tamed, and before the productivity revolution brought by AI is fully transmitted to the supply side, the Fed will absolutely not succumb to short-term political and market pressures to ease monetary policy.