Global Economy
Fed Chair Kevin Warsh Promises to End Recent Inflation Surge
During his first congressional hearing since taking office in May, Federal Reserve Chair Kevin Warsh vowed to make the five‑year spell of high inflation a thing of the past. He warned that the Fed will not tolerate persistently elevated inflation and hinted that policy could tighten as early as September if price pressures do not ease. Inflation has been above the Fed’s 2 % target for more than five years, but June’s CPI slipped to 3.5 % year‑over‑year, helped by lower gasoline prices. Markets are watching closely for a potential rate hike at the July 28‑29 policy meeting.
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Fed Chair’s First Congressional Hearing
New Federal Reserve Chairman Kevin Warsh, sworn in May, appeared before the House Committee on Tuesday and pledged to make the “high‑inflation years of the past five years” a thing of the past.
“If we pursue the right policy – and we will – the inflation spike of the last five years will belong to history,” Warsh told lawmakers.
Zero Tolerance for Persistent Inflation
The central‑bank chief added that the Fed “has no tolerance for inflation that stays too high for too long.”
Current Inflation Data
U.S. consumer‑price inflation has lingered above the Fed’s 2 % target for more than five years. In June, the CPI eased to 3.5 % year‑over‑year, down from 4.2 % in May, helped by lower gasoline prices.
Monetary‑Policy Outlook
The Fed has left its benchmark interest rate unchanged since December. Markets are betting on a possible hike as early as September to curb inflation. The next policy meeting is scheduled for July 28‑29.
Warsh’s remarks suggest the committee will act decisively if inflation does not continue to fall, a signal that could weigh on equities and bonds in the short term.