🚨 Everything could change after today's Fed hearing.

Fed Chair Kevin Warsh testifies before Congress today for the first time since taking the job.

His own rate committee is split 50/50. Half of policymakers want to hike rates by year end. Half want to hold or cut. Warsh himself submitted no personal forecast at all.

Here's the full picture of what he's walking into:

1. Fed funds rate: currently 3.6%

2. Fed's own rate committee: split 50/50 on hiking vs holding or cutting by year end

3. June jobs report: only 57,000 jobs added, less than half of May's total

4. U.S. labor force: down 1.34 million since January 2025, after actually being up 0.8 million as of January 2026, a swing of over 2 million in just five months

5. Jobless claims: 215,000 for the week ending July 4, still historically low

Every one of these numbers points in a different direction, which is exactly why lawmakers have so much to press him on today.

Take the labor force swing first.

Claims staying low while the labor force shrinks this fast suggests people are leaving or not entering the workforce, not simply getting laid off. That can make unemployment look fine on paper while real hiring quietly stalls, and it directly affects how Warsh reads the Fed's full employment mandate.

On inflation, Warsh has said he doesn't want the Fed chasing the 2% target too precisely, and he's comfortable if inflation runs a little above it.

Lawmakers are expected to ask whether he'd be just as comfortable if inflation ran a little below 2% instead, since the Fed officially treats both directions as equally concerning.

He's also inheriting a track record that raises the stakes on this question.

Powell's years averaged 3.09% inflation, the highest of any Fed chair since the 2% target was set in 2012.

On top of that, the New York Fed's survey shows people now expect 3.4% inflation over the next year, up from about 2.4% in 2024.

Inflation expectations cooled once already after the 2022 spike, and now they're climbing again, which is a second warning sign, not just noise.

One more thing lawmakers are likely to bring up: the Fed's newest report mentioned M2 for the first time in ten years.

M2 is simply the total amount of money circulating in the economy, cash, checking accounts, savings, all of it.

For years the Fed said this number doesn't matter much for inflation. Bringing it back into an official report now suggests officials are having second thoughts, and lawmakers may ask Warsh directly whether he thinks government spending and the money supply are feeding inflation.

All of this lands on Warsh's desk at once today.

A shrinking labor force pushes toward cutting rates. Rising inflation expectations push toward hiking them.

How he answers these questions in front of Congress will show which way he's actually leaning, and that's exactly why everything could change after today.