Federal Reserve Chairman Kevin Warsh is set to deliver his inaugural semiannual testimony on monetary policy to the House Financial Services Committee. Scheduled for July 14, 2026, this testimony comes at a pivotal time as the Federal Reserve maintains its federal funds rate target range at 3.50%–3.75%, amid persistent inflation pressures. Warsh’s agenda appears to prioritize price stability over maximum employment, suggesting a potential shift in the Fed’s approach. Market participants are closely monitoring the testimony for any hints of future interest rate adjustments, with current expectations suggesting at least one 25-basis-point rate hike by year-end.

Key Takeaways

• Markets suggest a significant likelihood of no change in interest rates following the July 2026 meeting, with a 92.5% YES pricing.
• The Fed chairman’s testimony could indicate a cautious approach to future rate hikes, consistent with a decrease in expectations for immediate hikes.
• Current market pricing implies a 44.5% probability of a rate hike by the September 2026 meeting, reflecting uncertainty in the Fed’s policy direction.

What to Watch

Market participants will focus on Warsh’s testimony for insights into the Federal Reserve’s priorities and any potential shifts in policy direction. The testimony may provide clues about how the Fed plans to address inflation and economic stability, influencing expectations for future rate hikes. Key factors to watch include any changes in language regarding inflation and employment, which could indicate the Fed’s approach in the coming months.

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