Trump's Trials - Kevin Warsh says the Fed is determined to bring rising prices under control

Episode Date: July 16, 2026

In his first testimony as the new chairman of the Federal Reserve, Kevin Warsh shared his views on a range of topics from artificial intelligence to immigration. NPR's Scott Horsley reports.Support NPR and hear every episode of Trump's Terms sponsor-free with NPR+. Sign up at plus.npr.org.See pcm.adswizz.com for information about our collection and use of personal data for sponsorship and to manage your podcast sponsorship preferences.NPR Privacy Policy

You're listening to Trump's terms. I'm Scott Detrow. The president has both an ability and a willingness to use the power of his office, to think outside the box. Nobody makes a better deal than President Trump. We're going to do better and better and better. Nobody can believe what they're watching. Every episode, we bring you one story from NPR's recent coverage of the 47th president. With a focus on ways his administration is pushing the boundaries of presidential power.

Here's the latest from NPR. From NPR News, I'm Leila Faldol. The new chairman of the Federal Reserve took questions from lawmakers this week for the first time since taking over the central bank. The topics included artificial intelligence, immigration, and inflation. Kevin Warsh said the Fed is determined to bring rising prices under control. NPR Scott Horsley was watching the testimony so you didn't have to, and he joins me now to discuss. Good morning, Lerley. So what did Warsh say about inflation?

swings we've seen in energy prices. Yeah, there have been some big swings. Gas prices jumped sharply just as Warsh was sworn in his Fed chair back in May as a result of the U.S. war with Iran. That pushed annual inflation to its highest level in more than three years. Then we had the ceasefire and gasoline prices fell. And of course, now that ceasefire has unraveled and gas prices are climbing again. They jumped another nickel a gallon just overnight. Worse told senators there's not a lot he and his fed colleagues can do about any individual price. But if they do their jobs right, worse, says overall inflation will come down. When prices go up, I know it hits your constituents every day. I'm not trying to sound dismissive of it, but I also don't want to say that there's much that we can do

about cattle prices or milk prices today. But there's a lot we can do to make sure that the entire grocery aisle doesn't have higher prices. And that's what we're committed to do. Warsh has been deliberately vague about what he wants to do with interest rates, but his tough talk on inflation sounds like someone who wants to keep rates relatively high for now. And that's what investors are betting Warsh and his colleagues will do when they meet in a couple of weeks. Now, artificial intelligence is driving a lot of spending. How is Warsh reacting to it? Yeah, big tech companies are investing huge sums of money in AI, and that has the potential to affect two things the Fed watches very carefully, inflation and the job market. Right now, for example,

computer chip prices are going up because of all the data centers, but we're also seeing a lot of construction jobs. Worse says over time the impact of AI could be different. In the nearer term, I think this investment is probably quite good for jobs as we're building out the infrastructure. And over the long term, my best guess is that this will improve American productivity. But between the short term and the long term, it can have a disruptive effect. And we're attuned to that. Warsh has appointed a task force to explore how AI might affect the Fed's work. And he's expecting recommendations by the end of this year.

Warsh also got some questions about immigration. What did he say? You know, like his predecessor, Jay Powell, Warsh, tries to stay in his lane, and he stressed that immigration policy is up to Congress and the White House, not the Federal Reserve. But the questions he got do highlight some of the divisions within the Republican Party. GOP Senator Tom Tillis in North Carolina warned the administration's aggressive crackdown on immigration, both legal and illegal, could leave the U.S. with a real shortage of workers. People are high-fiving and talking about net zero immigration growth as if it's a good thing. It's only a good thing if you want to repeat the mistakes of Western Europe, Japan, China, and other nations that didn't get their replacement right right.

Another Republican Senator, Bernie Moreno of Ohio, took the opposite attack. He says a rebound in immigration would make the Fed's job harder. If you have dramatically more humans in the United States looking for work, by definition, it makes full employment more difficult. Now, Warsh was careful not to get dragged into that debate, but clearly immigration policy can make a big difference in the size of the U.S. workforce, and the potential for economic growth. NPR, Scott, Horsley, thanks for that rundown, Scott.

You're welcome. A note before we go, if you value this show and want to help keep it going, a free and totally easy way to support us is to rate and review Trump's terms on the platform where you listen. In a world of algorithms, that goes a long way toward helping us reach new listeners. If you have left a review in the past, thank you so much. I'm Scott Detrow. Thanks for listening to Trump's terms from NPR. are.