Federal Reserve Chair Kevin Warsh is heading into his first Capitol Hill questioning as chair, putting his cautious approach to interest-rate guidance in front of lawmakers at a tense moment for the economy.
Warsh is scheduled to appear Tuesday before the House Financial Services Committee, followed by testimony Wednesday before the Senate Banking Committee. It will be his first appearance before lawmakers since his confirmation.
The hearings are expected to focus on whether the central bank should consider cutting interest rates while the Iran war continues to push inflation concerns through Washington. Warsh has resisted previewing future rate decisions, a stance that lawmakers are likely to test in public.
He is also expected to face questions over recently announced task forces at the Federal Reserve. The details of those efforts have drawn attention from lawmakers watching how the new chair plans to manage the central bank’s internal agenda.
The inflation backdrop gives the hearings sharper political weight. The Commerce Department is expected to report Tuesday that core inflation, which excludes food and energy, continued to accelerate in June even as oil and gas prices fell.
Fed Governor Christopher Waller warned Monday that another strong inflation reading would put pressure on the central bank to consider a tougher path.
“If we get another hot reading on core inflation this week, then the [Fed] will need to consider tightening monetary policy in the near term,” Waller said.
For Warsh, the first hearings are not just a debut. They are an early test of how much he is willing to tell Congress before the Fed’s next move is made.
