Federal Reserve Chair Kevin Warsh made his first international appearance since taking the helm of the U.S. central bank, joining a panel discussion at the European Central Bank's annual Forum on Central Banking in Sintra, Portugal, alongside ECB President Christine Lagarde, Bank of England Governor Andrew Bailey and Bank of Canada Governor Tiff Macklem.
The panel, which began at 9 a.m. EDT (1300 GMT), was Warsh's first public appearance outside his June 17 press conference following his debut FOMC meeting as chair. It offered the first real test of how his deliberately "low-information" communication style translates to an international stage — and whether it would soften or reinforce the hawkish signal he sent U.S. markets two weeks earlier.
What happened
At his first FOMC meeting on June 17, Warsh held the federal funds rate steady at 3.5%-3.75% — the lowest level since November 2022 and the fourth consecutive hold — but struck a notably hawkish tone. The Fed's updated "dot plot" erased the prior outlook for a 2026 rate cut and instead signaled the possibility of a hike, with a median year-end funds rate projection of 3.8%. Warsh also declined to submit his own dot, telling reporters, "It's not helpful in the conduct of policy," and unveiled a shorter, stripped-down policy statement that dropped much of the Fed's prior forward guidance.
In Sintra, Warsh shared the stage with three central bank governors — Lagarde, Bailey and Macklem — who had each signed a letter earlier this year backing former Fed Chair Jerome Powell amid his public conflict with the Trump administration. Yardeni Research analysts said ahead of the appearance that they were "surprised by Warsh's hawkishness," while markets used the panel to gauge whether his June tone was a one-off or the new baseline for Fed communication.
Why it matters
Warsh's comments since his June 17 debut have prompted investors to boost the odds of a Fed rate hike as soon as September or October, putting the U.S. central bank on a starkly different path than the Bank of England and Bank of Canada, both of which have shown reluctance to tighten given softer local economies. The ECB, by contrast, has already moved to raise rates this year, putting Warsh's Fed in unusual alignment with Frankfurt rather than London or Ottawa on the direction of policy.