Calling inflation an “unfair burden,” Federal Reserve Chairman Kevin Warsh on Tuesday repeated his call for “regime change” at the central bank.
“This is a tax on the American people and businesses. We plan to get rid of this tax,” he said. “What this means is that we need regime change in politics and we need to take a fresh look at methods, some of which work, some of which don’t.”
Appearing before select congressional panels this week, Warsh reinforced his recent tough talk on inflation while touting the strength of the U.S. economy and the benefits coming from business investments, especially those using artificial intelligence.
He identified five working groups that he created to review all aspects of the Fed’s business. Experts will look at communications, technology, the balance sheet, the economic data the Fed uses and how it views inflation.
Taken together, Warsh said they would advance his goals of reforming the central bank.
“In six weeks, we have, I think, brought about a fundamental change in new thinking – the beginning of a series of reforms that will be carried out across at least five dimensions of monetary policy,” he said. “We’ve made a lot of progress in six weeks, but I think it’s important to use this opportunity wisely.”
The remarks came just two months into Warsh’s term. Fed chairs are required to appear before Congress twice a year to report on monetary policy and then answer questions from lawmakers.
“Today we are at a turning point in history. We all have to face this moment,” said Warsh, who testified before the House Financial Services Committee on Tuesday and then chaired the Senate Banking Committee on Wednesday.
“The Fed’s number one goal is to get monetary policy right—or as close to it as possible. This is our clear and constant goal, the star by which we are guided,” he added. “And if we get the policies right – and we will – the inflation surge of the last five years will be a thing of the past.”
Kevin Warsh, Chairman of the US Federal Reserve, during a hearing of the House Financial Services Committee in Washington, DC, US, Tuesday, July 14, 2026.
Daniel Heuer | Bloomberg | Getty Images
Warsh has led the Fed, where inflation has exceeded its 2% mandate since 2021. During his confirmation hearing earlier this year, the chairman called inflation a “choice” and repeatedly stressed the importance of lowering the cost of living during his first news conference. He first spoke of “regime change” during an interview with CNBC last summer.
Warsh further criticized the Fed’s past practices, particularly the policies adopted in 2020 that allowed inflation to run above target after periods of lower prices. This policy, known as flexible average inflation targeting, was specifically aimed at addressing employment imbalances, something Warsh argues is beyond the Fed’s purview.
“This central bank was not the first central bank to ask for a little more inflation and end up getting a lot more. It was a mistake,” he said. “This structure did not achieve its goals, and I am glad that before I arrived, my predecessors took this and threw it away.”
Like his predecessor Jerome Powell, Warsh noted that persistently high inflation “has placed an unsustainable burden on American households and businesses,” which are facing higher costs across the board, with the latest surge driven in large part by rising energy prices.
“While monthly price fluctuations are inevitable, especially in a volatile world, core inflation over longer time horizons is determined largely by monetary policy,” he said. “Our committee members cannot tolerate ever-increasing inflation. And we share a strong commitment to restoring price stability.”
In terms of broader conditions, Warsh said the economy is “growing at a strong pace, demonstrating resilience in the face of recent events.”
He pointed to business investment, which he called “the most striking feature” of the current climate.
“The rapid pace that appears to be accelerating largely reflects the construction of data centers and the huge demand for the AI-related hardware and software that fills them,” he said.
“We don’t know to what extent the economy will benefit from AI,” he added. “However, it seems inevitable that what is now called ‘AI investing’ will soon be called simply ‘investing’.”
Warsh has previously said he expects the AI productivity boom to be disinflationary, a premise that some economists as well as fellow Fed policymakers dispute.
Elsewhere, Warsh elaborated on the five task forces he created to conduct a comprehensive review of the Fed’s operations.
Together, he said, the groups are part of the “new chapter of the Federal Reserve.” However, while Warsh previously blamed Fed “officials” for institutional problems, he has taken a more conciliatory tone since taking office.
“It was an honor to return to the Fed and once again work with so many talented and dedicated people that I was fortunate enough to call my colleague,” he said.
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