Fed Chair Warsh Holds Rates, Signals Hawkish 2026 Stance

Kevin Warsh used his first Federal Open Market Committee meeting as Fed Chair this week to signal a more aggressive stance on inflation than markets had anticipated. Rates held steady. But Warsh’s tough inflation rhetoric Wednesday reverberated across asset classes — pushing bond yields higher and pulling equities lower. It was a sharp departure from the rate-cut path Trump had expected when he appointed Warsh.

The hawkish pivot carried immediate consequences. Goldman Sachs analysts cut their gold price forecast by $500, citing reduced expectations for near-term rate cuts. Rate-cut bets for 2026 collapsed across futures markets following Warsh’s press conference. Warsh fielded questions from reporters for the first time as chair, making clear that bringing inflation to target would take priority over growth support.