Are Higher Rates Warranted? the Fed Chairman Declines to Say.

Chairman Kevin Warsh declined to say Wednesday whether the Federal Reserve would need to consider raising interest rates at its next meeting.

"I'm not going to make a judgment now," said Warsh, when pressed during a discussion over whether inflationary pressures demanded a response from the central bank.

The remarks, made at a conference alongside foreign counterparts in Portugal, were Warsh's first public appearance since his debut press conference at the Fed's policy meeting last month. Warsh became Fed chairman on May 22.

The Fed has held its benchmark rate in a range of 3.5% to 3.75% all year after making quarter-point cuts at each of its final three meetings of 2025. Officials agreed to those reductions amid worries that a softening labor market could need more support and believing policy was restrictive enough to keep lowering inflation.

The outlook has since shifted. Job growth, which stalled at the end of last year, has firmed. The U.S. economy has motored along, powered by the AI build-out and a stock-market rally lifting spending among higher-income households. And a deal meant to end the war in Iran has pushed energy prices down.

Together these raise the prospect that even if overall inflation eases in the months ahead, robust growth will keep underlying price pressures stuck above the Fed's 2% target. Several officials have urged the central bank to weigh rate increases this year, and a strong June jobs report on Thursday could embolden some to press for a hike.

Of the 19 officials at last month's meeting, the 18 who submitted projections split evenly on the path ahead. Nine saw higher rates as warranted by year-end, eight favored holding, and one penciled in a cut. (Warsh, in keeping with his skepticism of the projections, didn't submit one.)

Together with Warsh's blunt pledge last month to restore price stability, the more hawkish-than-expected projections led markets to anticipate a rate hike later this year, though interest-rate futures markets still lean toward a hold at the July 28-29 meeting.

Warsh repeatedly sidestepped questions Wednesday about the outlook and policy implications for the Fed. "There's a lot of late breaking news on a series of these things. When we get into that room and shut the door, we're going to have a good debate," he said.

Write to Nick Timiraos at Nick.Timiraos@wsj.com

(END) Dow Jones Newswires

July 01, 2026 09:32 ET (13:32 GMT)

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