Federal Reserve Chairman Kevin Warsh said Wednesday that inflation risks have declined in recent weeks but that the central bank still had more work to do to rein in rising prices.Limited time: Save 25% on NBC News subscriptionGet exclusive reporting, live Q&As and ad-free reading.“Inflation risks have come down,” Warsh said, noting that “energy prices have come down quite substantially” since the United States and Iran signed a memorandum of understanding to end the ongoing war last month.“They’re still a bit above where they were pre-conflict, but they’ve come down,” he said.Inflation is a sore spot for Americans, who are growing more dissatisfied with the economy, according to polls and consumer surveys.
In May, inflation as measured by the Consumer Price Index jumped to 4.2%, its highest level since 2023.The Fed’s preferred inflation gauge also showed price growth was hot, driven by the surge in energy prices.
Warsh also weighed in on artificial intelligence’s growing impact on the economy and inflation, sounding an optimistic note on longer-term prospects for the technology.Journalists watching Kevin Warsh speak during a panel on the last day of the 2026 European Central Bank Forum on Central Banking in Sintra, Portugal, on Wednesday.Horacio Villalobos / Getty Images“We’re all being hit by a series of shocks in the U.S.,” Warsh said.“The AI shock is leading to a boom in capital expenditures.
We see that first and foremost in demand, but I’m confident we’re going to see it in supply at some point.So we’re spending most of our time trying to monitor those developments.”Still, the central bank chief declined to give any hint as to if policymakers will raise interest rates: “I’m not going to give you any prediction as to what we will do.” Warsh has said that he plans to break with recent Fed leaders in limiting the amount of communications about the Fed’s future plans.Asked if the Fed will make that decision regar...