Kevin Warsh will testify before Congress for the first time as Fed chair this week. Lawmakers will want answers.
As Fed chair, Kevin Warsh is required by law to testify before Congress twice a year. His first visit comes this week.
During his first month as chair of the Federal Reserve, Kevin Warsh has made clear that he believes less is more when it comes to explaining his views on the economy.
In fact, Warsh has been essentially silent on relevant market issues.
But this week, as Warsh testifies before Congress for the first time as Fed chair, he will go before an audience of lawmakers who will want answers.
"Warsh has to respond to his bosses on Capitol Hill," Mark Spindel, chief investment officer at Potomac River Capital and co-author of a 2017 book titled, "The Myth of Independence: How Congress Governs the Federal Reserve," said in an interview.
It will be difficult for Warsh to say that the Fed's approach to navigating the risks in the outlook should not be open for discussion, said Jonathan Pingle, chief U.S. economist at UBS.
Members of Congress will want Warsh to elucidate his plans for bringing inflation down to the Fed's 2% target. That's the "fundamental rationale" for bringing Warsh before the committee, he added.
Warsh will testify to the House Financial Services Committee on Tuesday at 10 a.m. Eastern time and to the Senate Banking Committee the following morning. The Fed chair is required by law to testify before Congress twice a year.
His testimony comes as the Fed's interest-rate committee has moved markedly in the direction of possible rate hikes. In June, nine Fed officials projected one rate hike this year, and six of them saw more than one move.
Markets see a 70% chance of a rate hike by September, according to the Atlanta Fed's Market Probability Tracker.
Claudia Sahm, chief economist at New Century Advisors and a former Fed staffer, said she thought some central-bank officials were impatient and were ready to hike rates to bring inflation down.
But there is also a camp of Fed officials who believe the central bank can be patient and see whether inflation ticks down before taking action. Oil prices have plunged recently, and renewed tensions between Iran and the U.S. didn't push them back up by much.
Warsh hasn't said which camp he is in.
When he was campaigning for the job, Warsh made the case, on television and elsewhere, for interest-rate cuts - the White House's preferred position at the time. But as chair, he has been adamant about not prejudging the outcome of the July rate-setting meeting. In this, he has made it clear he is trying to emulate former Fed chiefs Paul Volcker and Alan Greenspan, who both tried to say as little as possible in public.
That stance didn't sit well with Congress. Those two Fed chairs are remembered for their epic battles with the legislative branch. When Volcker - who served so long ago that smoking was still allowed in the hearing room - didn't like a line of questioning, he would disappear behind a large cloud of cigar smoke.
Greenspan is remembered for telling a member of Congress that if the lawmaker thought he understood what Greenspan was saying, he was certainly mistaken.
Spindel said those chairs' testimony was akin to when former Secretary of State Henry Kissinger asked reporters if there were any questions for the answers he was prepared to give.
Warsh is likely to face pushback to this approach, as he comes into his first testimony having none of the gravitas of Volcker or Greenspan, Spindel said.
"He doesn't come to the job with the long CV of empirical analytics of Paul Volcker or Alan Greenspan," Spindel said.
On top of that, Democrats on Capitol Hill view Warsh as a close ally of the White House, even though the Federal Reserve is supposed to act independently.
They are unlikely to pull any punches, sensing that they have a chance to take control of at least one of the two congressional chambers in November if they can tie President Donald Trump and the Fed chair he installed to high inflation readings.
Warsh may also try to sidestep questions, as he did in June in his first press conference as chair, by telling lawmakers he has set up five task forces to help him accomplish "regime change" at the central bank.
One of those groups will focus on how the Fed fights inflation.
Spindel said these strategies may not succeed.
"Congress has a way of forcing communications," he said.
-Greg Robb
This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
July 11, 2026 07:00 ET (11:00 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
Comments