Skip to navigationSkip to main contentSkip to right columnADVERTISEMENTBy Francesco Canepa and Howard SchneiderSat, July 4, 2026 at 1:26 AM GMT+2 6 min read(Corrects quote in paragraph 2, adding reference to 'in households or the business sector, in the financial markets')By Francesco Canepa and Howard SchneiderSINTRA, Portugal, July 1 (Reuters) - Federal Reserve Chairman Kevin Warsh said on Wednesday he will stick firmly to the U.S. central bank's 2% inflation target and "disappoint" anyone who expects loose monetary policy despite President Donald Trump's call for interest rate cuts."If there were people in households or the business sector, in the financial markets, who thought that this central bank was going to be comfortable with an inflation objective above 2% -- well, I guess they'd be disappointed," Warsh told a European Central Bank panel in Sintra, Portugal, emphasizing that — beyond restating the inflation objective — he'd give little indication about where he thinks monetary policy or the economy are headed.Asked if the potential for disappointment extended to Trump, who picked Warsh to take over as head of the Fed and has said he expects borrowing costs to fall, Warsh said, "we have been an independent central bank for a long time. We are going to be an independent central bank at this moment and you will see no changes on that."Warsh spoke just two days after the U.S. Supreme Court ruled Trump could not fire Fed Governor Lisa Cook, affirming the central bank's standing even as the justices expanded the president's power to remove members of other ostensibly independent bodies — a ruling Warsh said he read but doesn't think will change how the Fed goes about its business.The public appearance in Portugal, Warsh's second since taking over as Fed chief in May, saw him join with other top central bankers in what became a common rejection of "forward guidance" and a seeming reluctance even to say much about the economy.Warsh said U.S. central bankers will decide whether to raise rates, for example, when they "shut the door" and begin their next two-day meeting on July 28, and told the moderator of the panel she would "fail" to break his rule against commenting about rate decisions or even the risks and factors framing the debate.Traders slightly trimmed their rate-hike bets as Warsh spoke, but still put 70% odds on the Fed increasing borrowing costs at its September 15-16 meeting."It increasingly looks like investors' early assumption that a Warsh-led Fed would quickly cut rates will not play out," Oren Klachkin, financial market economist at Nationwide, wrote after Warsh's appearance. "The balance of risks has clearly shifted," Klachkin added, even though he expects the Fed will ultimately hold rates steady through the year.Terms and Privacy PolicyEU DSA contactPrivacy & Cookie SettingsMore Info