Possibly—but Warsh’s inflation warning alone can’t tell you whether your savings account is losing purchasing power. Compare the account’s interest rate with inflation measured over the same period. On August 28, 2026, Federal Reserve Chair Kevin Warsh said the 12-month change in the PCE price index was 3.7% and its six-month change was 4.1%; both were above the Fed’s 2% target. Those are PCE measures, not the headline CPI rate, and neither is automatically the inflation rate your account earned against.
What did Warsh say about inflation?
In an August 28, 2026 speech, Federal Reserve Chair Kevin Warsh said inflation remained above the Fed’s 2% price-stability objective. He cited a 3.7% change in the personal consumption expenditures (PCE) price index over 12 months and a 4.1% change over six months. The periods and measure matter: these are PCE figures, not the Bureau of Labor Statistics’ Consumer Price Index (CPI). Warsh’s speech describes the 2% objective as a firm, fixed target.
Separately, on July 15, 2026, New York Fed President John C. Williams said inflation was about 4%, above the Federal Open Market Committee’s longer-run goal of 2%. He discussed tariffs, supply-chain disruptions, higher energy and commodity prices amid the Middle East conflict, and demand for goods and electricity associated with technology investment. That was his assessment at that date, not another version of Warsh’s specific PCE figures. Williams’s remarks give the context for his statement.
How to tell whether your savings are keeping up
Your account balance can grow while what it can buy shrinks. Interest increases the nominal dollars in a deposit; inflation reduces those dollars’ purchasing power. The comparison is meaningful only when the account return and inflation measure cover the same period. Federal Reserve Education explains the relationship.
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- Find your account’s return for the period. Check the APY and whether it was variable or fixed. For a variable savings account, today’s APY may not be the rate you earned over the preceding six or 12 months.
- Choose an inflation measure and matching dates. For example, compare a 12-month account return with a 12-month inflation rate, rather than comparing a current APY with a six-month price change.
- Compare the rates. If the account’s return is below inflation over that period, the balance gained less than prices rose, so its purchasing power declined. If the return is above inflation, it gained purchasing power before considering taxes.
A simple approximation is account return minus inflation. For instance, if an account returned 3% over a year while prices rose 4% over that same year, the approximate real return would be negative 1 percentage point before taxes. The exact purchasing-power change is calculated as (1 + account return) ÷ (1 + inflation) − 1.
Which inflation number should you compare with?
The PCE price index and CPI are different measures. Warsh’s August figures were PCE; the CPI release is produced by the Bureau of Labor Statistics and measures changes in prices paid by consumers. Don’t label one as the other or treat different time windows as interchangeable.
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The latest CPI report available on October 7, 2026, covered August: the BLS reported a 3.4% increase over the 12 months through August 2026. The report was published September 11. The September CPI release was scheduled for October 14, 2026, so the August figure is not the latest report after that date. Check the BLS August 2026 CPI release for the dated figure and release details.
Where can cash go if a savings account falls short?
The right place for cash depends on when you may need it, how much access you require, and the instrument’s current terms. No provider rate or offer is established here, so check current APYs or yields, fees, minimums, insurance status, and withdrawal or maturity rules before moving money.
Do these 3 things before closing this tab:
1Fix the driver behind crashes, sound loss and screen glitches2Clear out junk files and repair common Windows errors3Scan for outdated or missing drivers - takes under a minute| Option | When it may fit | What to check |
|---|---|---|
| High-yield savings account | Emergency reserves or cash you may need readily | Whether the APY is variable, access and withdrawal rules, balance requirements, fees, and applicable deposit insurance |
| Certificate of deposit (CD) | Cash you can set aside for a defined term, such as six months to a year | Term, fixed rate, minimum balance, early-withdrawal penalty, fees, and applicable deposit insurance |
| Treasury bills | Cash that can be committed until a specified maturity | Maturity date, yield, purchase and sale terms, and how early access would work |
| I bonds | Cash intended for a longer holding period | Current terms, purchase limits, and restrictions on when redemption is allowed |
These are general cash-management categories, not personalized recommendations. A potentially higher rate does not necessarily make an option better if its access rules do not fit your needs.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What Warsh’s warning does—and does not—tell savers
Warsh’s figures show that inflation, by the PCE measure and periods he cited, was above the Fed’s 2% objective. They do not establish whether any particular savings account beat inflation: that depends on the account’s actual return over the same period, including changes in a variable APY. Use a dated, like-for-like comparison before deciding whether your cash is gaining or losing purchasing power.
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