Warsh's first global speech as Fed Chair delivered no hint of a July move, and a blunt reminder that prices are still too high
Kevin Warsh declined Wednesday to signal the central bank's next move on interest rates, using his international debut as Federal Reserve Chair to deliver a pointed message: inflation in the United States remains too elevated.
Speaking at the European Central Bank's Forum on Central Banking in Sintra, Portugal, Warsh shared a stage with ECB President Christine Lagarde, Bank of England Governor Andrew Bailey, and Bank of Canada Governor Tiff Macklem — a panel that exposed how widely the global inflation problem persists.
"We're all in the price stability business," Warsh said during the moderated session. "We've all looked around, and we've seen that prices are too high."
The remarks offered little immediate comfort to mortgage professionals. The 30-year fixed mortgage rate has hovered near 6.49%, according to Freddie Mac's latest weekly survey, and core personal consumption expenditures — the Fed's preferred inflation gauge — came in at 3.4% in the most recent reading, well above the central bank's 2% target.
No guidance and no rush to cut
Warsh, confirmed as Fed Chair in May 2026, has consistently rejected forward guidance, and Sintra was no different. The Federal Open Market Committee voted unanimously to hold the benchmark rate at 3.5%–3.75% at its June 16–17 meeting.
Its updated dot plot pushed the median 2026 rate projection to 3.8%, up from 3.4% in March, signaling a hike remains on the table.
CME FedWatch data puts the probability of a July hold at approximately 70%, with a 62% chance of a September hike priced into futures markets, according to the Freddie Mac analysis published June 25.
Marty Green, Principal at Polunsky Beitel Green, discusses why a more flexible Federal Reserve approach could help the central bank respond to economic changes while influencing the outlook for mortgage rates and housing markets.https://t.co/BQ4G40R39M
— Mortgage Professional America Magazine (@MPAMagazineUS) June 22, 2026
Warsh acknowledged that conditions modestly shifted since he took office. "Expectations of inflation over the first four weeks of this period, they've come down," he said. "Inflation risks have come down."
But he left no ambiguity about the destination. "We're going to deliver price stability in the US," he added.
For brokers, that pledge translates to a prolonged holding pattern. Odeta Kushi, deputy chief economist at First American in Washington, D.C., told Mortgage Professional America ahead of the Sintra forum that borrowers and loan officers should not expect relief soon.
"The more likely story for the second half of the year is volatility around a higher-for-longer range, rather than a meaningful decline in mortgage rates," she said.
"If inflation remains sticky and investors continue to demand compensation for inflation risk, mortgage rates may stay elevated."
What Warsh is building at the central bank
Away from rate policy, Warsh offered a glimpse into longer-term structural changes underway at the Fed.
Staffing for five task forces, announced last month to rethink how the central bank operates, will be detailed next week, he said.
The vision, he explained, centers on using emerging technology to understand economic conditions in something closer to real time.
"My hope, my aspiration, is that nine to 12 months from now we're going to be using new technologies to understand what's happening in the real economy in a contemporaneous real-time way that positions us as central bankers to make better decisions," Warsh said.
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