Federal Reserve Chairman Kevin Warsh said policymakers at the central bank have no tolerance for high inflation, reiterating a vow to tame price growth that has been elevated for five years.
"The members of our committee have no tolerance for persistently elevated inflation," Warsh said Tuesday in testimony he's scheduled to deliver before lawmakers at 10 a.m. "And we share a resolute commitment to restoring price stability."
The new Fed chairman has emphasized policymakers' commitment to tackling inflation since he took office in May and said the number one objective is to get monetary policy right.
"If we get policy right — and we will — the inflation surge of the last five years will be a thing of the past," Warsh said in remarks to the House Financial Services Committee.
Warsh's remarks before the panel come amid warnings from several other Fed policymakers that higher interest rates may be needed to curb inflation. The testimony was prepared prior to the Bureau of Labor Statistics' release of fresh consumer inflation data covering June.
Warsh was upbeat on the overall economy, describing the labor market as broadly stable with few signs of layoffs and solid nominal wage growth.
The Fed chief was more circumspect on the artificial intelligence boom, which he said is driving a surge in business investment but also posing uncertainties for the economy.
"We don't know the extent to which the economy will benefit from the AI build-out," Warsh said. "New opportunities for the economy introduce new challenges for policymakers. We at the Fed are monitoring the implications for inflation and the labor market."
Minutes of the Federal Open Market Committee's June 16-17 meeting reflected growing concern among policymakers over inflation just as worries over the labor market slightly receded.
Officials voted unanimously at that gathering, the first under Warsh's leadership, to hold the Fed's benchmark interest rate in a range of 3.5% to 3.75% for a fourth consecutive time.
New rate projections released alongside that decision showed nine officials foresaw at least one quarter-point hike this year, with six anticipating at least two. Another nine expected no move or a cut. Warsh, who has been critical of so-called forward guidance that offers clues on the path for rates, declined to submit a forecast.
