Warsh's Regime Change at the Fed: Has Inflation Been Tamed?

New Federal Reserve Chair Kevin Warsh promised to bring about a 'regime change' at the central bank to tackle inflation when he took over in January 2026. With more than 100 days under his belt, the Fed is indeed undergoing changes, particularly in its communication policies.

The new approach has reduced the number of signals sent to the market about what to expect from the Fed's decisions. However, the Fed's preferred gauge of inflation, the personal consumption expenditures (PCE) price index, rose 3.7% in the year through July 2026, indicating that inflation is still a concern.

Warsh has launched five policy task forces and shortened the post-meeting policy statement since taking office on May 22. He has also been more reserved in sharing details about future actions compared to his predecessor Jerome Powell.

The Consumer Price Index (CPI) fell slightly in July, reaching 3.4% over the prior 12 months, down from 3.5% in June. However, core PCE, which excludes critical spending categories like food and energy, was still higher than desired at 3.3%. The 30-year mortgage interest rate averaged 6.66% on August 27, up from 6.51% in Warsh's first week.