Fed's Warsh Tells Congress Central Bank Has 'No Tolerance' for High Inflation

Federal Reserve Chair Kevin Warsh delivered his debut testimony to the House Financial Services Committee, striking a firm tone on inflation just hours after data showed consumer prices cooling in June. In prepared remarks, Warsh said the central bank has 'no tolerance' for elevated inflation, underscoring a hawkish posture even as the latest reading offered some relief. Lawmakers pressed him on price stability, past policy missteps and the Fed's expanded balance sheet, which committee members noted has grown substantially since the 2008 financial crisis. Committee Chairman French Hill said price stability remains a major concern, describing inflation as significantly elevated at over 2%. The appearance came against a backdrop of the Fed holding its benchmark rate in a range of 3.50% to 3.75%, with policymakers having signalled a possible increase. Following the softer June inflation figures, markets were pricing the central bank to hold rates steady at its July 28-29 meeting and to raise them by a quarter percentage point in September. Warsh, who has launched reviews of how the Fed communicates and operates, faces the challenge of balancing inflation risks against a cooling labour market.