A High-Stakes Debut
Warsh is set to appear before the House Financial Services Committee at 10 a.m. Eastern on July 14 to present the central bank’s semi-annual Monetary Policy Report and answer questions from lawmakers. The Senate Banking Committee is expected to hold its own session with the chair the following day.
The testimony is required by law. Under the Humphrey-Hawkins Full Employment Act of 1978, the Fed chair must appear before both chambers of Congress twice a year, in February and July, to explain the central bank’s policy decisions. For Warsh, confirmed in May by a 54-45 Senate vote to succeed Jerome Powell, it will be the first such test under oath.
It arrives at a delicate moment as inflation has proven sticky, energy prices have climbed amid the Iran war, and a growing number of Fed officials have signaled that rate increases before year-end. Lawmakers on both sides are likely to press Warsh on how aggressively he intends to act.
Holding Steady, For Now
At his first meeting as chair, Warsh struck a hawkish tone while keeping policy unchanged. The Federal Open Market Committee (FOMC) voted 12-0 on June 17 to hold the federal funds rate in a range of 3.5% to 3.75%, the fourth consecutive meeting without a change.
Warsh used his first news conference to underscore the central bank’s commitment to its 2% inflation target. “We’ve missed on inflation for five years and we’re going to fix that,” he said, signaling little patience for price pressures. He also announced the creation of several task forces to review how the Fed communicates, the data it relies on, and the frameworks it uses to judge inflation.
The hawkish signal landed as nine Fed officials penciled in at least one rate hike this year, and traders quickly repriced the odds of tighter policy. According to CME Fedwatch data, the probability of a September rate hike jumped to 49%, up sharply from 27% a day earlier.
Crypto’s Eyes Are Set on Warsh
For digital-asset markets, the Fed’s direction matters as much as any single data point. Higher interest rates raise the appeal of cash and government bonds, drawing capital away from risk assets such as bitcoin. Crypto prices have slid since the June meeting, with bitcoin trading near $64,000 as rate-cut hopes for 2026 faded.
Research firm Grayscale has argued that bitcoin’s recent underperformance is tied directly to rising rate-hike expectations, and that the cryptocurrency could rebound if those expectations ease. That makes Warsh’s testimony a potential market event because any softening or hardening of his inflation message could move both equities and crypto together.
The chair’s words will also carry political weight, especially since Warsh has insisted he will not be a “sock puppet” for the White House (despite President Trump pushing publicly for lower rates). His July testimony will be the clearest signal yet of whether the new Fed leadership intends to hold the line on inflation or yield to pressure for easier policy.
The next few weeks will likely witness investors parsing Warsh’s prepared remarks and his answers for any hint on the September meeting, where the case for a hike is building fast.
