Federal Reserve Chair Kevin Warsh pushed back against investor optimism that the worst of inflation is over, telling the House Financial Services Committee that the June decline in trailing 12-month inflation to 3.5% from May's three-year high of 4.2% is just one data point and not a sign of victory. Warsh, a known monetary hawk who served on the FOMC from 2006 to 2011, stressed that headline inflation has exceeded the Fed's 2% target for 63 consecutive months and that core PCE inflation rose to 3.4% in May, its highest since October 2023, signaling broad-based price pressures beyond energy. His remarks leave the door open for further interest rate hikes, which could threaten the record rallies in the Dow, S&P 500, and Nasdaq Composite by raising borrowing costs for debt-fueled AI investments.