Fed Chair Warsh Vows Inflation Will Be ‘Thing of the Past’ in First House Testimony
7 verified5 unconfirmed
Federal Reserve Chair Kevin Warsh will appear Tuesday for his first congressional testimony, telling the House Financial Services Committee that defeating high inflation is the central bank's top priority. In prepared remarks released by the Fed, Warsh pledged that the inflation surge of the last five years "will be a thing of the past" and stated that policymakers have "no tolerance for persistently elevated inflation." The testimony comes as the Fed remains divided on the next rate move, with about half of the rate-setting committee expecting a rate hike by year-end and the other half penciling in no change or a cut. Warsh, who declined to submit a rate forecast himself, is scheduled to testify before the Senate Banking Committee on Wednesday. In his remarks, he described business investment in artificial intelligence as "the most striking feature" of the economy and said the Fed is monitoring its implications for inflation and employment. The economy is "expanding at a solid pace," according to Warsh. The next Federal Open Market Committee meeting is scheduled for July 28–29.
What’s verified
Kevin Warsh delivered his first congressional testimony as Federal Reserve chair before the House Financial Services Committee on Tuesday.
In prepared remarks, Warsh said the Fed will make high inflation "a thing of the past" and has "no tolerance for persistently elevated inflation."
The Fed is divided: roughly half of the 18 or 19 policymakers expect at least one rate hike by year-end, while the other half favors no change or a cut.
Warsh did not signal the central bank's next policy move and declined to submit a rate forecast.
Inflation stood at 4.1% according to the Fed's preferred Personal Consumption Expenditures (PCE) measure, well above the 2% target.
Warsh described business investment in AI infrastructure as "the most striking feature" of the economy and said the Fed is monitoring its effects on inflation and jobs.
Warsh is also scheduled to appear before the Senate Banking Committee on Wednesday.
Not yet confirmed
The sources provide differing specifics on inflation data: one source reports a 0.4% monthly drop in prices for June and annual inflation at 3.5%, while the other source does not mention these figures.
A single source mentions that the rise in oil prices due to the Iran war and ongoing gas price increases are factors in the inflation outlook.
A single source reports that Warsh established five internal task forces to review Fed operations in communications, the balance sheet, economic data, productivity and jobs, and the central bank's approach to inflation.
A single source includes remarks from Fed officials Christopher Waller and John Williams about potential rate moves.
It remains unclear whether the Fed will raise, hold, or cut rates at its July 28–29 meeting.
Key figures
Kevin Warsh, Federal Reserve Chair
House Financial Services Committee
Senate Banking Committee
Jerome Powell, former Fed Chair (mentioned in one source)
Sources: abcnews.com, qz.com
