Latest improvement on inflation isn’t ‘mission accomplished,’ Warsh says

Key Points:

• Senator Elizabeth Warren criticized Federal Reserve Chairman Kevin Warsh for not submitting economic forecasts at the recent policy meeting, urging him to provide transparency on unemployment, inflation, and economic expectations amid political pressures.
• Warsh is scaling back the Fed's forward guidance practice and has not provided quarterly economic projections, aligning with his reforms aimed at limiting public communication on future monetary policy moves.
• The June inflation report showed a decline to 3.5% annual inflation from 4.2% in May, prompting markets to reduce the probability of a July rate hike, although inflation remains above the Fed’s 2% target.
• Warsh testified that interest rates do not favor any social class and emphasized the Fed’s independence from political influence despite ongoing pressures from the Trump administration.
• Major US banks reported strong second-quarter earnings driven by trading and investment banking, while Fed officials, including Governor Christopher Waller, expressed readiness to raise rates again if inflation remains elevated.