In 7 Words, Kevin Warsh Just Sent the Clearest Signal Yet About Where Interest Rates Are Headed in 2026 With his tenure just about a month and a half old, new Federal Reserve Chair Kevin Warsh has been fairly tight-lipped about his views on the economy and where he thinks…
terest rates should go. This is, of course, by design, as Warsh has made it clear that he wants the Fed to take more of a back seat when it comes to how communicative the Fed is to the market, believing markets function more efficiently when they digest economic data on their own rather than worrying about how the Fed will react
While nothing is set in stone, Warsh just sent the clearest signal yet about where interest rates are headed with these seven words. Why it’s hard to know exactly how Warsh feels about rates After President Donald Trump nominated Warsh, many believed Warsh would try to appease Trump, who has been a staunch advocate for the Fed to lower rates further. In a Wall Street Journal op-ed prior to his confirmation, Warsh discussed how artificial intelligence (AI) could be “a significant disinflationary force,” leading Fed watchers to believe he would use this as his main pitch to achieve lower rates.
Warsh has also talked about viewing inflation through a different lens, known as the “trimmed averages” approach. Under this method, the prices with the most extreme changes are removed from the basket when calculating overall price changes in the economy. In February of 2026, the Federal Reserve Bank of Dallas calculated a trimmed-mean rate for the Fed’s preferred inflation gauge, the Personal Consumption Expenditures (PCE) Price Index.