Warsh's Inflation Fight: Has the New Fed Chair Delivered on His Promise?

New Federal Reserve Chair Kevin Warsh promised to bring about a 'regime change' at the central bank to conquer inflation when he took over in January 2026. Nearly four months into his tenure, it's unclear if he has delivered on this promise.

The Fed's preferred gauge of inflation, the personal consumption expenditures (PCE) price index, rose 3.7% in the year through July 2026, which is far from the institution's long-term target of 2%. Despite Warsh's efforts to change the communication style at the Fed, there are still many hints about how the central bank will act.

The Federal Open Market Committee (FOMC) has met twice under Warsh's tenure so far, and both times, the interest rate was held steady. This decision may be a 'fig leaf' for the consistently elevated inflation readings, but it doesn't necessarily signal that the Fed thinks inflation is fully under control.

Asset prices suggest that investors are still wary of inflation. The SPDR Gold Shares (GOLD) ETF and Bitcoin (BTC) have both performed well recently, which may indicate that market participants think inflation is not yet defeated.