New Federal Reserve Chairman Kevin Warsh told Congress he has no tolerance for persistently elevated inflation, a message market participants viewed as significantly stricter than anticipated. With inflation remaining above the 2% target for five consecutive years, the FOMC kept the federal funds rate at approximately 3.6% while adopting a hawkish tone that led traders to price in rate hikes as early as September 2026. Warsh also established outside expert task forces to review the Fed’s economic assessments and communication strategies, while emphasizing the central bank’s independence from political pressures. Bonds and growth stocks could face headwinds if this restrictive monetary policy stance holds through the second half of 2026.
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