Warsh defends Fed independence as inflation, AI effects come under Senate scrutiny

Federal Reserve Chair Kevin Warsh faced Senate questions on how AI spending could affect inflation, his communications with President Trump, and how the Fed will judge whether inflation is temporary or persistent, all while signaling a more reserved approach to future rate moves. He highlighted five new task forces—on inflation framework, AI’s impact on jobs and productivity, and the Fed’s bond holdings—to study data sources and evolving conditions, and he cautioned that inflation readings are imperfect even as recent data show some easing.