Federal Reserve Chair Kevin Warsh faced a challenging session on Capitol Hill Wednesday as Senators pressed him on a wide range of economic issues, including the potential impact of artificial intelligence on inflation, his communications with President Donald Trump, and how the Fed plans to assess the persistence of inflationary pressures.

Since assuming office seven weeks ago, Warsh has taken a notably less transparent approach to signaling the Federal Reserve’s future interest rate decisions compared to his predecessors. During his second day of congressional testimony, many lawmakers expressed frustration over his reluctance to provide detailed explanations of how the central bank might respond to evolving economic conditions.

When asked about the effects of substantial investment in AI infrastructure on inflation, Warsh emphasized that a one-time price change does not necessarily equate to ongoing inflation, pointing instead to potential supply-side responses. He noted that while AI-related investments might raise measured prices over the next year, whether that translates into broader inflation would be determined by the Federal Reserve’s policies.

Warsh also downplayed recent government data suggesting a slowdown in inflation, which could ease the Fed’s efforts to control borrowing costs. On Wednesday, officials reported that wholesale inflation decelerated in June, following figures released the previous day showing consumer prices declined from May to June for the first time in six years. Year-over-year inflation dropped to 3.5 percent in June from 4.2 percent in May.

“Any central banker would be happy to have data going in the right direction,” Warsh said, but he cautioned that these figures are imperfect indicators of the underlying inflation trend. To address this uncertainty, he announced the creation of a task force to review the sources and reliability of inflation data used by the Fed.

Regarding his independence, Warsh reaffirmed his commitment to act autonomously and resist political influences, particularly amid President Trump’s repeated demands for lower interest rates. However, when directly asked whether he had communicated with Trump since his appointment, Warsh declined to provide a clear answer, stating he preferred not to disclose private discussions. He reiterated that he has made it clear to both the President and Treasury Secretary that the Fed chair’s role requires independent decision-making.

The hearing underscored ongoing tensions between the Fed’s leadership and lawmakers as the central bank navigates complex economic dynamics while maintaining its autonomy in a politically charged environment.