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Warsh Avoids Rate Signal After Soft CPI, Repeats Inflation Pledge
Fed Chair Kevin Warsh avoided rate-path clues in his congressional testimony after softer CPI, repeating his commitment to price stability and criticizing the central bank's 2020 inflation framework.
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Federal Reserve Chair Kevin Warsh gave no signal on the next interest-rate move during his first semiannual testimony to Congress. The appearance came hours after June CPI printed softer than expected.
Warsh repeated his commitment to price stability. He said policymakers have "no tolerance for persistently elevated inflation" and share "a resolute commitment to restoring price stability." He avoided endorsing speculation about a near-term rate hike despite renewed geopolitical tensions and higher oil prices.
"The inflation surge of the last five years will be a thing of the past" if the Fed gets policy right, Warsh said. He argued that long-run inflation is "determined largely by monetary policy" even if monthly data fluctuate.