Warsh Reaffirms Inflation Fight, Signals No Retreat Despite Cooling CPI
By CU Today Staff —
WASHINGTON—Federal Reserve Chairman Kevin Warsh used his first appearance before Congress to reaffirm the central bank's commitment to defeating inflation, declaring the Fed has "no tolerance" for persistently high price pressures despite a fresh report showing inflation cooled sharply in June, the New York Post reported.
Appearing before the House Financial Services Committee, Warsh avoided signaling his next interest-rate move but emphasized the Fed's focus on restoring price stability.
"The Fed's number one objective is to get monetary policy right – or as near to it as we possibly can…And if we get policy right – and we will – the inflation surge of the last five years will be a thing of the past," Warsh said, according to the New York Post.
The New York Post noted Warsh's comments came just hours after the Bureau of Labor Statistics reported the Consumer Price Index posted its largest monthly decline since 2020, prompting investors to increase expectations that the Fed will leave interest rates unchanged at its meeting later this month. Warsh, a longtime critic of providing forward guidance, declined to offer any indication of future rate decisions.
Warsh also told lawmakers the labor market remains "broadly stable," reinforcing the Fed's emphasis on inflation under its dual mandate of maximum employment and stable prices. He added that the "most striking feature of the economy right now is business investment," pointing to rapid spending fueled by the artificial intelligence boom, which he said is creating new challenges for policymakers, the New York Post reported.
Originally reported by CU Today.