Fed Chair Kevin Warsh signals shift toward new inflation data triggers for policy decisions

According to CNBC, Federal Reserve Chairman Kevin Warsh said the central bank is plotting a “new course” that could change the data triggers it uses to implement monetary policy, including how it measures and reacts to inflation. Speaking at the European Central Bank Forum on Monetary Policy in Sintra, Portugal on July 1st, 2026, Warsh said he hopes that in nine to 12 months the Fed will use new technologies to track the real economy in real time, and he said the Fed has formed five task forces, including groups focused on data and on inflation measurement. The report cited multiple inflation gauges that can diverge from the Fed’s 2% goal, including CPI showing headline inflation at a 4.2% annual pace in May and core inflation at 2.9%, while the personal consumption expenditures price index put headline inflation at 4.1% and core at 3.4%. Other measures cited included the Dallas Fed “trimmed mean” at 2.4% over 12 months, the Atlanta Fed’s sticky-price gauge at 3.1% and flexible prices at 7%, and Truflation at 1.75%. Market-based measures referenced included a five-year inflation indicator at 2.26% and a one-year breakeven rate around 3% after falling nearly half a percentage point since May.