Federal Reserve Chairman Kevin Warsh testified before the House Financial Services Committee on Tuesday to deliver the Fed's semiannual report on monetary policy.
The testimony marks a critical moment for the central bank as it navigates inflation and emerging economic pressures. Because this was Warsh's first appearance before Congress as Fed chair [4], lawmakers used the session to gauge the administration's appetite for further tightening.
Warsh appeared before the committee at the U.S. Capitol in Washington, D.C., with live coverage of the proceedings beginning at 10 a.m. ET [1]. The session focused on the Fed's current monetary strategy and the broader economic outlook, including the impact of artificial intelligence and the expansion of data centers on the U.S. economy.
Lawmakers questioned Warsh on several fronts, specifically regarding how the Fed is managing inflation and the potential for new rate hikes. These inquiries come as market pricing indicates a Fed rate increase is expected by year-end [2].
Beyond the immediate horizon, the financial markets are looking further into the future of the U.S. economy. Current projections suggest a second Fed rate increase could be expected by mid-2027 [3].
Warsh said these expectations while discussing the Fed's commitment to its dual mandate of price stability, and maximum employment. The discussion also touched upon the systemic risks and opportunities presented by the rapid growth of AI-driven infrastructure, which has become a focal point for the House Financial Services Committee.
“Warsh's first appearance before Congress as Fed chair”
This testimony signals a period of potential monetary tightening. With markets pricing in rate increases through 2026 and into 2027, the Federal Reserve is signaling that inflation remains a persistent concern. The specific focus on AI and data centers suggests the Fed is now analyzing how technological infrastructure shifts may influence long-term productivity and inflationary pressures.
