Federal Reserve Chairman Kevin Warsh at the Jackson Hole Economic Symposium Aug. 28, 2026, in Jackson Hole, Wyoming. (Natalie Behring/Getty Images)
(WASHINGTON) — In a highly anticipated speech Friday morning, Federal Reserve Chairman Kevin Warsh voiced concern about persistently high inflation, saying the central bank should focus on bringing down prices — but stopped short of explicitly calling for an interest rate hike.
“We must be confident that underlying inflation is moving to our objective, clearly and at sufficient speed. Otherwise, we have work to do,” Warsh said in remarks prepared for delivery at the Fed’s annual conference in Jackson Hole, Wyoming.
The remarks signaled a strong commitment by the newly installed Fed chair to fight inflation.
Inflation eased slightly in July, the most recent month on record, but has spiked in recent months fueled by higher oil prices from the Middle East crisis. Overall prices have been increasing at a pace above the Fed’s 2% target for more than five years, which Warsh said is a responsibility that lies “squarely” with the central bank.
“The Fed’s predominant focus right now should be on prices,” said Warsh, who is in his third month in the role after replacing Jerome Powell.
Typically the Fed hikes interest rates to tame high prices. Warsh did not directly comment on the central bank’s interest rate plans, noting the practice of “forward guidance” — where the Fed telegraphs its next moves in advance — “should be limited” and “has overstayed its welcome.”
President Donald Trump has repeatedly called on the Fed to cut interest rates.
Investors are now pricing in a roughly 60% chance the Fed increases its key borrowing rate next month, up from 35% Thursday ahead of Warsh’s speech, according to CME FedWatch.
“We believe that markets heard what they needed to hear to believe that Warsh will tighten monetary conditions to restrain inflation, and that he will encourage the FOMC to pull the trigger soon,” said Carl Weinberg, chief economist at High Frequency Economics, in a research note after Warsh’s speech.
Warsh said Friday that he is “impressed by the overall performance of the economy, which appears to have strengthened.” He pointed to solid consumer spending and a steady job market. But Warsh noted that certain sectors of the economy like housing and agriculture “are showing strains.”
He also detailed how artificial intelligence is reshaping the economy, with more than half of capital expenditure growth this year so far attributed to the buildout of AI.
“We’ve come to a hinge point in history,” Warsh said.
Governor of Minnesota Tim Walz makes a speech during the ’10th Austrian World Summit’ climate conference at the Hofburg Palace in Vienna, Austria, June 16, 2026. (Salih Okuroglu/Anadolu via Getty Images)
(WASHINGTON) — A federal judge on Monday tossed out multiple Justice Department subpoenas to Minnesota Gov. Tim Walz and other officials tied to a federal investigation regarding the state’s cooperation with federal immigration enforcement, according to a newly published legal opinion.
Patrick Schiltz, chief judge of the Minnesota federal district court, found that the subpoenas were “part of a broader campaign to coerce state and local officials” to aid the Trump administration in supporting federal immigration activities that “played out against the backdrop of the Trump administration’s well-established history of using criminal investigations to retaliate against and pressure the President’s political and personal adversaries.”
“The fact that connections between the information sought in the subpoenas and any possible criminal violation range from extremely weak to nonexistent only adds to the overwhelming evidence that these subpoenas were not issued to investigate, but to harass, coerce, and retaliate,” Schiltz wrote in his order released Monday.
The subpoenas, which were issued on Jan. 20 against the backdrop of the Trump administration’s aggressive immigration surge in Minnesota that drew widespread protests, sought an expansive amount of information from Walz and others including Minneapolis Mayor Jacob Frey, St. Paul Mayor Kaohly Her, Minnesota Attorney General Keith Ellison and the Hennepin County Attorney’s Office and Board of Commissioners.
In his opinion quashing the subpoenas, Schiltz lambasted the government for their “extraordinarily broad” request examining materials “that largely if not entirely relate to constitutionally protected conduct.” It’s almost unheard of for federal judges to quash criminal subpoenas from Justice Department prosecutors.
“The Department has launched a significant incursion into matters that the Constitution reserves to sovereign states, and one would expect that the Department would not have done so unless it was aware of compelling evidence of criminal or at least suspicious behavior,” Schiltz said.
Pointing to a series of statements from President Donald Trump, including social media posts previewing a “DAY OF RECKONING AND RETRIBUTION” was coming for Minnesota — followed by a leak just three days later of a purported federal investigation in Walz and Frey — Schiltz said there was a clear pattern established of the government using its powers purely to punish Trump’s adversaries for their refusal to cooperate with federal immigration enforcement.
justify the subpoenas, which he said had such a remote connection to potential criminal conduct “as to be spurious.”
“The Department suggests that requiring city officials to report known ICE activity to the City Council could result in the dissemination of that information-and that dissemination of that information could, in turn, result in other individuals evading or interfering with future ICE activity,” Schiltz wrote. “This reasoning piles speculation upon speculation, while also taking aim at perfectly legal-indeed, constitutionally protected-behavior. As a general matter, any citizen who happens across law-enforcement activity has a constitutional right to observe it, to record it, and to mention it to anyone they’d like-including members of the Minneapolis City Council.”
The order follows a similar move by the chief district judge in Washington, D.C., in March that quashed subpoenas tied to the DOJ’s investigation of then-Federal Reserve Chairman Jerome Powell, after Judge James Boasberg determined the probe was based on no clear evidence and appeared purely rooted in Trump’s animus towards Powell.
“Today’s ruling is a victory for the rule of law and our democracy. A federal district judge found that the U.S. Department of Justice’s investigation into me and other Minnesota elected officials was politically motivated, unconstitutional, and meritless,” Walz said in a statement.
“The U.S. Justice Department is pursuing criminal investigations into the President’s political opponents,” Walz said. “This case was just one example of that, but we are seeing daily reminders of this administration’s lawlessness — in Minnesota and around the country. We all must continue to seek justice and uphold the rule of law.”
Frey, in his own statement, said that “criticism of our government is not a crime.”
“One of the defining strengths of our democracy is the ability to challenge those in power without fear of retribution,” Frey wrote. “Elected officials have both the right and the responsibility to speak honestly about how government decisions affect the people they serve.”
In a statement responding to the ruling, a DOJ spokesperson did not say whether the Justice Department plans to appeal Schiltz’s order.
“The department takes the unlawful obstruction of federal law enforcement operations extremely seriously and will continue to act in full compliance with the law to investigate these matters,” the spokesperson said.
Sen. Ruben Gallego (D-AZ) talks to reporters as he heads for a vote at the U.S. Capitol on June 01, 2026 in Washington, DC. (Photo by Chip Somodevilla/Getty Images)
(WASHINGTON) — Arizona Sen. Ruben Gallego is under federal investigation for suspected campaign finance violations, a person familiar with the matter confirmed to ABC News.
According to multiple reports, Gallego, a Democrat, used campaign funds to fly his family to the Caribbean, Miami, Nantucket and Puerto Rico. He also allegedly used funds to pay for childcare.
Campaign funds may be used to pay for a candidate’s childcare expenses that are incurred as a direct result of campaign activities, according to the Federal Election Commission.
On Monday, the Senate Ethics Committee closed its inquiry into allegations of sexual misconduct and campaign finance violations after finding no evidence that Gallego violated Senate rules or applicable law, according to a letter released by his office.
In regards to the federal investigation, a Gallego spokesperson told Axios that “it’s the least surprising news of the week that this comes immediately after the Senate Ethics Committee cleared Senator Gallego of right-wing smears pushed by the administration.”
ABC News has reached out to Gallego’s office for comment on the investigation. The Department of Justice has not yet commented on the probe.
Cherry blossoms at the Supreme Court on a windy morning in Washington, D.C. (John Baggaley/Getty Images)
(WASHINGTON) — The Supreme Court on Thursday ruled in favor of Ali Hemani, a Texas man charged with unlawful possession of a gun since he admitted that he regularly smoked marijuana.
The court said the law as applied to him is unconstitutional.
This is a developing story. Please check back for updates.
