Federal Reserve Chair Kevin Warsh, in his first testimony before Congress, said the regulator would not allow high inflation to persist. He defined rampant inflation of the past five years as an unfair tax on Americans and urged a "regime shift" in central bank policy. At its June meeting, the Federal Reserve kept the key interest rate at 3.50–3.75%.
Kevin Warsh described the US economy as steadily growing. He identified corporate investment in artificial intelligence (AI)—the construction of data centers and the purchase of software—as the main driver of the upswing. Spending on high technology has surged nearly 25% year‑on‑year. According to the Fed chair, the term "investment in AI" will soon become synonymous with ordinary investment. However, the effects of these technologies on labor efficiency still need to be studied in detail.
To modernize the central bank, Kevin Warsh announced the creation of five targeted working groups. They will analyze key aspects of the Federal Reserve’s work: communication strategy, balance sheet management, data sources, the AI impact on productivity, and the framework for inflation policy. The chair emphasized that these reforms would open a "new chapter" in the history of the Federal Reserve System.
