Inflation, AI and more: Key takeaways from Fed Chair Kevin Warsh's testimony

Fed Chair Kevin Warsh told Congress the Federal Reserve is committed to bringing US inflation back to its 2% target.

Warsh stated the Fed has 'no tolerance' for high inflation and can use tools like interest rates and its balance sheet to stop higher prices from spreading.

Inflation in the US rose from 2.4% in February 2026 to 4.2% in May 2026 due to higher oil prices from the Iran war, then slowed to 3.5% in June after a temporary ceasefire.

Warsh responded to Senator John Kennedy that inflation 'is not going to be permanent on my watch.'

Economist Skanda Amarnath of Employ America said Warsh is unlikely to keep raising interest rates every time inflation stays above target because the Fed must consider impacts on jobs and the economy.