WASHINGTON D.C. — Kevin Warsh presided over his first Federal Open Market Committee meeting last week after being named Federal Reserve Chairman. He stated the Federal Reserve would deliver price stability following a rise in inflation to 4.2 percent last month.

Nine of 19 committee officials projected at least one interest rate hike would be appropriate later this year. Eight members projected the federal funds rate would remain in its current range of 3.5 to 3.75 percent. One member projected an interest rate cut. Warsh declined to provide an interest rate prediction after the meeting, saying committee members would be "very attentive to incoming developments" before their next meeting at the end of July. Traders in futures markets priced in the possibility of an interest rate increase in September.

Last summer, Warsh stated the Federal Reserve had committed "the greatest mistake in macroeconomic policy in forty-five years" by allowing inflation to surge post-COVID. The 4.2 percent inflation rate recorded last month marked the highest level in over three years. During a press conference, Warsh said the Federal Reserve had not met its inflation target in more than five years. He also cited economist Milton Friedman's dictum that "inflation is always and everywhere a monetary phenomenon."

Late last year, Warsh publicly argued that artificial intelligence could generate gains in productivity and be "structurally disinflationary." Workers' productivity had been accelerating before recent corporate investments in artificial intelligence. However, artificial intelligence investment is leading to shortages and price increases for components like memory chips. Wages rose more slowly than prices in the past year.

President Donald Trump, who was in Europe for the G-7 summit during the Federal Reserve meeting, stated prior to the appointment that he would choose a Federal Reserve chair who "believes in lower interest rates, by a lot." He said about the prospect of the Federal Reserve raising rates, "It's hard to believe. It just keeps a country down, you know." In 2019, Trump called Federal Reserve policymakers "boneheads" for not cutting interest rates as quickly as he desired.