Federal Reserve Watch for July 14: FOMC Has 'No Tolerance' for Elevated Inflation
Fed Chair Kevin Warsh (voter) said in prepared testimony that the FOMC has "no tolerance" for elevated inflation and is focused on restoring price stability, suggesting that the heightened inflation of the last five years will be "a thing of the past" if policy is done right. Warsh's comments follow a consumer price report for June that showed an energy-led 0.4% decline in the overall index and a flat reading for core prices, slowing the year-over-year rates considerably, though they remain above the Fed's 2% target. Warsh said in his testimony that it was just one data point and that the objective is to achieve price stability so that households do not need to think about it. He said that "job number one" is assuring that short-term inflation does not become sticky and longer-lasting. Warsh added that the balance sheet remains part of monetary policy and that any changes will be clearly announced. He said that politics has no place at the Fed, which will continue to stay out of fiscal policy. He agreed that housing interest rates remain high, which he attributed to high inflation, and repeated that the FOMC will deliver price stability that would lead to housing being more.
Fed Chair Kevin Warsh (voter) said in prepared testimony that the FOMC has "no tolerance" for elevated inflation and is focused on restoring price stability, suggesting that the heightened inflation of the last five years will be "a thing of the past" if policy is done right.
Warsh's comments follow a consumer price report for June that showed an energy-led 0.4% decline in the overall index and a flat reading for core prices, slowing the year-over-year rates considerably, though they remain above the Fed's 2% target.
Warsh said in his testimony that it was just one data point and that the objective is to achieve price stability so that households do not need to think about it.
He said that "job number one" is assuring that short-term inflation does not become sticky and longer-lasting.
Warsh added that the balance sheet remains part of monetary policy and that any changes will be clearly announced.
He said that politics has no place at the Fed, which will continue to stay out of fiscal policy.
He agreed that housing interest rates remain high, which he attributed to high inflation, and repeated that the FOMC will deliver price stability that would lead to housing being more.