A close ally of Fed Chair Kevin Warsh called the argument that current interest rates are restrictive "just ridiculous," challenging the Federal Reserve’s policy stance as personal consumption expenditures inflation remains 3.7% year over year and 4.1% on a six-month annualized basis. The Fed’s 2% inflation target has been missed for 65 consecutive months, according to Warsh’s Aug. 28 Jackson Hole speech, while employment conditions have remained relatively stable. Since taking the helm in mid-2026, Warsh has promoted a "regime change" focused on shrinking the balance sheet, tightening fiscal guidance and refocusing the central bank on price stability and maximum employment. The comments could force traders who expected stable or declining rates to reassess that outlook.