The Fed’s Long War on Inflation
From “transitory” to a new hawkish chair, the Fed has spent years rebuilding credibility the hard way — and 2026 is testing it again.
Powell's early “transitory” read aged badly; the brutal 2022–2023 hiking cycle restored the Fed's resolve; a 2024 soft-landing bet got messier than advertised. Now Kevin Warsh inherits sticky inflation and a divided committee.
Is the thesis getting stronger?
How the story moved.
- WeakenedNov 30, 2021
“Transitory” retired
Powell drops the word as inflation accelerates — a credibility low.
- StrengthenedAug 26, 2022
“Some pain” — and follow-through
The Fed commits to crushing inflation and largely delivers by 2023.
- ShiftedJun 17, 2026
A new, more hawkish chair
Warsh holds rates, drops guidance, and raises the inflation forecast. Markets fall.
Jerome Powell
Former Chair (2018–2026) · U.S. Federal Reserve
Powell called inflation “transitory.” It wasn’t.
“We tend to use the word transitory to mean that it won't leave a permanent mark in the form of higher inflation. I think it's probably a good time to retire that word.”
Jerome Powell
Former Chair (2018–2026) · U.S. Federal Reserve
“Not even thinking about thinking about raising rates.”
“We're not thinking about raising rates. We're not even thinking about thinking about raising rates.”
Jerome Powell
Former Chair (2018–2026) · U.S. Federal Reserve
Powell warned of “some pain.” He meant it.
“While higher interest rates, slower growth, and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses. These are the unfortunate costs of reducing inflation.”
Jerome Powell
Former Chair (2018–2026) · U.S. Federal Reserve
Starting to cut, Powell saw no downturn coming.
“I don't see anything in the economy right now that suggests that the likelihood of a downturn is elevated.”
Kevin Warsh
Chair (since 2026) · U.S. Federal Reserve
The new Fed chair’s hawkish opening line.
“I am pleased to report that members of the FOMC are unambiguous and unanimous: This Committee will deliver price stability.”
What strengthens, what weakens.
- JP
Jerome Powell
Former Chair · Federal Reserve
- KW
Kevin Warsh
Chair · Federal Reserve
What to watch next.
Next CPI print
Whether inflation cools from ~4% toward target.
Next FOMC decision
Whether the new chair hikes to defend the target.
- Too early to knowPendingon “Warsh’s debut: “deliver price stability””
Called Jun 17, 2026