Fed’s Warsh: Inflation not slowing, 2% target by 2026 remains priority

Federal Reserve Chair Kevin Warsh stated that inflation is not decelerating and reaffirmed the commitment to achieving a 2% inflation target by 2026. Warsh’s comments underscore the Fed’s resolve to bring down the inflation rate, which stood at 3.7% as of July 2026 according to the 12-month Personal Consumption Expenditures (PCE) price index. This target is a critical benchmark for the Fed’s monetary policy, and Warsh’s stance suggests the possibility of maintaining or even increasing interest rates if inflation does not align with the target. The federal funds rate is currently set between 3.5% and 3.75%. Market participants appear to interpret Warsh’s remarks as an indication that the Fed may not be inclined to cut rates in the near term. Current pricing in prediction markets reflects a decreased likelihood of a rate cut at upcoming Federal Reserve meetings. The odds of a rate cut in the October 28, 2026 meeting, for instance, have seen significant fluctuations, indicating market uncertainty over future Fed actions. Key Takeaways Warsh’s comments appear to indicate a firm stance on inflation control, suggesting interest rates may remain steady or rise. Market pricing suggests a d...