Federal Reserve Chair Kevin Warsh is about to testify before Congress for the first time in his role as Fed chair, where he will join lawmakers in analyzing the latest U.S. inflation data during a two-day hearing.
On Tuesday at 10 a.m., the House Financial Services Committee will hold a hearing in Washington, following the Bureau of Labor Statistics’ release of the June consumer price index. Shortly after the BLS releases its producer price index data, Wash will testify before a Senate committee hearing on Wednesday.
Economists expect prices to ease after the surge from March to May.
Recent declines in gasoline prices may help lower the consumer price index (CPI), which could record its first monthly drop since the pandemic began in 2020. However, the producer price index (PPI) may show that upstream inflation pressures continue to intensify as energy shocks from the Iran conflict persist. Economists expect the 12-month change rate of the core PPI, excluding food and energy prices, to accelerate from 4.9% to 5.2%.
Over the coming week, several other Federal Reserve officials will also speak, suggesting that the silence surrounding the Fed since Wash’s appointment may begin to lift.
Including Federal Reserve Governor Christopher Waller’s speech on Monday; New York Fed President John Williams and Federal Reserve Governor Lisa Cook’s speeches on Wednesday; and Federal Reserve Vice Chair Philip Jefferson, Dallas Fed President Lorie Logan, and Kansas City Fed President Jeff Schmiedl’s speeches on Thursday.
The market currently implies a 24% chance of a rate hike in July—a figure too low to suggest the Fed will actually act at that time. To significantly increase the likelihood of a hike, we would likely need both a strong CPI report and clearly hawkish remarks from the Fed chair on Tuesday—neither of which seems very probable.
