Federal Reserve faces Congress as Warsh presents monetary policy report

Kevin Warsh walked into his first congressional testimony as Federal Reserve Chair carrying a report that signals a meaningful shift in how the central bank thinks about inflation. The hearings, scheduled for July 14 and 15, 2026, mark Warsh’s debut before Congress in the chair role, and the Monetary Policy Report released ahead of those sessions on July 10 tells you most of what you need to know about where he’s taking the institution.

What the report actually says

The June FOMC meeting produced no rate change. The Fed held its policy rate at 3.5 to 3.75%, a level that has now become the fulcrum around which every macro trade is being calibrated.

Warsh’s document leans into discussions of money supply dynamics, a topic that has been notably absent from recent Fed communications under prior leadership.

The report also highlights what it describes as robust capital investment trends alongside persistent inflation pressures. That combination is the Fed’s version of a difficult hand to play. Strong investment usually signals a healthy economy, but it also means demand isn’t cooling fast enough to kill inflation on its own.

Warsh’s 2% inflation target isn’t new policy, it’s the same target the Fed has nominally held for years. What’s new is the credibility signal: the report frames the target as firm rather than aspirational.

The timing of the hearings is not incidental. Fresh Consumer Price Index and Producer Price Index data are set to drop in close proximity to the testimony, meaning Warsh is walking into a room where Congress will have live inflation numbers to wave around.

Crypto’s role: officially peripheral

The Monetary Policy Report contains no references to Bitcoin, Ethereum, or any specific crypto asset. The Fed, under Warsh, is treating digital assets as outside its direct monetary policy deliberations.

When rate cut expectations rise, risk assets including crypto tend to rally. When the market prices in a higher-for-longer stance, capital rotates toward yield-bearing instruments and away from speculative assets. Bitcoin doesn’t need to be in the Monetary Policy Report to be affected by it.

What this means for markets and investors

The CPI and PPI releases that coincide with Warsh’s testimony are genuinely important data points for actual rate-path modeling. Warsh has already telegraphed his framework: 2% or bust, money supply matters, and any inflation stubbornness will be met with policy tools.

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