Federal Reserve Chair Kevin Warsh urged investors on Wednesday to focus on economic data rather than trying to predict the Fed’s next move. He advised them to react to actual results, not to speculate about what the Fed might do.
The comment came shortly after the Federal Open Market Committee (FOMC) decided to keep interest rates unchanged, with nine members in favor and three opposed. Warsh, however, didn’t describe the decision as a temporary halt.
Why Warsh Told Markets to Play the Ball
Warsh focused his entire press conference on a single point: inflation is too high, and the committee is committed to lowering it.
The Federal Reserve’s policy committee decided to maintain interest rates in the current range of 3.50% to 3.75%. Unlike previous announcements under Jerome Powell, this statement didn’t offer any hints about future rate decisions.
Warsh dismissed the possibility of adjusting the Fed’s target for inflation. He believes five years of higher-than-usual prices created a perception that the Federal Reserve was secretly accepting inflation rates above its 2% goal.
He also minimized the importance of the latest CPI data from June. He explained that overall trends are more significant than figures from just one month, and tackling inflation will take more time than a few weeks.
“We will deliver price stability,” Warsh assured.
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The announcement came with a caveat: the Federal Open Market Committee (FOMC) is prepared to take action when needed. This stance represents a change from John Williams’s initial comments in June, which had caused asset prices to fall.
How Bonds, SPY, and Bitcoin Responded
Warsh noted that both nominal and real Treasury yields have risen significantly across all maturities. He added that the Federal Reserve is intentionally avoiding intervening in these market changes, allowing market forces to dictate the direction of yields without interference.
The yield on the 10-year Treasury note fell slightly to 4.620% after briefly reaching 4.650% during the day. Throughout the week, investors considered the possibility of another interest rate increase by the Federal Reserve, and that consideration intensified when three Fed officials publicly supported a small rate hike.
The SPDR S&P 500 ETF Trust (SPY) rose to a positive value of $742.00, gaining 0.17%. Meanwhile, the price of gold increased, surpassing $4,100 – its highest point during trading today.
Bitcoin’s price increased, rising to around $64,237 in the last 24 hours, a gain of 0.84%. Its market value is now $1.29 trillion.
Despite this, longer-term bonds are still facing downward pressure because interest rates on government debt around the world have reached their highest point in over fifteen years.
Why Peter Schiff Says Warsh Cannot Deliver
Some disagreed with how the situation was being presented. Peter Schiff, the chief economist and CEO of Euro Pacific Asset Management, believed that nothing substantive had changed – only the way it was being discussed.
Despite Peter Schiff’s criticisms that the Federal Reserve is all talk and no action regarding their goal of 2% inflation – a target they didn’t meet under Powell’s leadership – so far, the Fed hasn’t changed its approach to interest rates or its assets. Everything remains the same, according to Schiff.
Schiff highlighted the rising end of the yield curve as proof of his argument. He explained that investors are selling government bonds (Treasuries) and investing in gold, indicating they don’t fully trust the current economic outlook.
Warsh believes the coming weeks will be about carefully analyzing information, not just passively waiting to see what happens. He’ll be looking to September to see if the economic data supports his views, rather than relying on opinions. Interestingly, President Trump has praised the Fed chair, calling them brilliant.
*TRUMP: FED CHAIR WARSH IS BRILLIANT
— tradfi news (@tradfi) July 29, 2026
2026-07-29 22:42