Cox Automotive chief economist Jeremy Robb took a few days to react to the first interest-rate decision made by the Federal Reserve led by new chair Kevin Warsh.

And what the new Fed leader pledged to do has Robb upbeat about what it could eventually mean for dealerships and finance companies.

But it might be a hot summer based on more than just the thermometer, especially since the federal funds rate could rise from its current range of 3.50% to 3.75% because of stubborn inflation.

“Fed chair Kevin Warsh’s message following his first Federal Open Market Committee (FOMC) meeting was clear: The Fed will be clearly focused on price stability above all else,” Robb wrote in his weekly commentary. “The unanimous vote to hold rates steady — with no dissents — and a closing statement that reads, ‘The committee will deliver price stability’ signal an institution aligned around an inflation-first posture.

“When it comes to interest rates, relief is unlikely anytime soon, and a hike remains a real possibility if inflation does not cooperate. The one constructive development: A deal to reopen the Strait of Hormuz has oil tankers moving again, raising the possibility that the peak of energy-driven inflation is now behind us,” Robb continued.

“Gas prices are down notably from their May highs. That is welcome relief, but restocking depleted inventories will take months and risk premiums on tanker traffic through the region are unlikely to disappear quickly. For the auto industry, the near-term picture is one of stable but elevated financing costs, U.S. consumers under pressure, and a credit market that is consistently stretching to bridge the affordability gap,” Robb went on to say.

According to AAA tracking as of Friday, the average cost for a gallon of gas in the U.S. dipped to $3.90. That’s down from the month-ago mark of $4.91, but it’s still up from the same time last year when AAA reported the average at $3.22.

And for reference, the all-time high in AAA’s database is a nationwide average price of $5.01 set on June 14, 2022.

Robb pointed out that fuel costs are likely to be just one of many economic trends the Fed examines when determining interest rates. Warsh spelled out a new approach he’s asking policymakers to take.

“I am appointing a task force in each of five areas that are central to the broad conduct of monetary policy: First, Fed communications; second, the Fed’s balance sheet policy; third, our use and reliance on existing data sources; fourth, productivity and jobs in an era of transformation; and last, the Fed’s inflation frameworks,” Warsh said.

“These subjects are timely, consequential, and in my view worthy of a fresh look. My colleagues and I discussed them with energy and purpose over the last couple of days,” Warsh continued. “For each of these independent task forces, I am enlisting some of the very best minds — both inside and outside the economics profession. They will be supported by subject-matter specialists from our superb Fed staff.

“And they will have a straightforward charge: start with first principles; ask hard questions; examine current practice; consider alternatives; and, ultimately, propose next steps for policymaker consideration,” he went on to say.

Robb said that decision is “perhaps the most forward-looking development” from this month’s Fed meeting.

“Two of the task forces stand out when considering the Fed’s central issue with inflation over the last several years. The task force on ‘data sources’ and the one on ‘inflation frameworks’ together suggest the Fed is taking a hard look at whether its current tools are the right ones for the job,” Robb said.

“The Fed has lagged inflation repeatedly in recent years, responding to price pressures after they were already entrenched. If these task forces lead to alternative data inputs or updated frameworks, the implication is a Fed that is trying to get ahead of inflation rather than react to it, a meaningful shift in posture that could shape policy decisions well into the next decade. It is a shift many American consumers would likely applaud,” Robb went on to say.