Federal Reserve Chairman Kevin Warsh testified Tuesday before the House Financial Services Committee regarding the agency's semi-annual monetary policy report. During his first congressional testimony, Warsh pledged to make high inflation a thing of the past and stated that the central bank has no tolerance for persistently elevated inflation, which has been elevated for five years.
Despite his vow to tame price growth, Warsh provided no signal about the central bank's next steps and has declined to say whether he supports higher interest rates to tame price pressures. His early policy and governance steps, including the creation of five new task forces focused on topics he describes as central to the broad conduct of monetary policy, are being seen as him setting an independent course.
Federal Reserve Governor Christopher Waller indicated that policymakers may need to raise rates in the near term if underlying inflation continues to signal broad price pressures. Waller noted that inflation has expanded beyond often-cited drivers such as the energy price spike in tariffs and stated he needs to see several months of lower inflation data to feel confident about the outlook.