Warsh’s Sintra Remarks Rattle Markets on Inflation, Independence

Fed chair reiterates hawkish stance from ECB forum, deflects rate-path questions ahead of July meeting

Federal Reserve Chair Kevin Warsh weighed on equity prices Wednesday with comments delivered from the European Central Bank’s Sintra forum, where he appeared alongside ECB President Christine Lagarde, Bank of England Governor Andrew Bailey and Bank of Canada Governor Tiff Macklem. Speaking with CNBC’s Sara Eisen, Warsh declined to signal what the Fed will do at its meeting later this month but made clear inflation remains his primary concern, telling the panel that despite growing “open-mindedness on these questions of AI, open-mindedness on productivity,” officials “have all looked around, and we’ve seen that prices are too high.”

The remarks reinforced the hawkish tone Warsh set at his first FOMC press conference two weeks ago, when he ended the Fed’s practice of forward guidance and delivered a statement whose closing line — “The Committee will deliver price stability” — was widely read on Wall Street as a signal that rate cuts are off the table for now. Nine of 18 FOMC members currently project at least one hike this year, with six projecting two or more.

Warsh also used the Sintra appearance to push back on President Trump’s continued pressure campaign against the central bank, stating flatly that “we’ve been an independent central bank for a very long time… you’re going to see no changes on that.”

Markets are also digesting a second straight month of rising U.S. job openings, which has pushed the implied odds of a July rate hike to roughly one-in-three, along with a slide in the yen to a 40-year low against the dollar — both reinforcing the same higher-for-longer rate narrative pressuring equities alongside Warsh’s comments.