Warsh’s hawkish inflation stance steadies markets as oil falls

Kevin Warsh’s first Fed chair press conference has steadied markets by signaling a hard line on inflation, helping push down long‑term inflation expectations as oil prices fall and the Iran‑related tensions ease. Inflation data showed PCE at 4.1% and core PCE at 3.4%, yet markets still price in at least one 25bp rate hike this year. Analysts say Warsh’s credibility rests on whether inflation moves toward the 2% target; if the data improve by September, he could stay tough without many hikes, but if not, further tightening may be needed to maintain credibility.