Warsh: Price Stability Remains Priority
Federal Reserve Chairman Kevin Warsh reiterated that the US central bank has zero tolerance for persistently high inflation. He made the statement in testimony before Congress on Wednesday (July 15th), echoing his remarks the day before.
Warsh's first congressional testimony comes at a crucial moment for the Fed's policy direction. In June, the central bank maintained its benchmark interest rate in the 3.50%–3.75% range but maintained a hawkish tone as inflation remained well above its long-term target of 2%.
Warsh said the Fed's primary goal is to ensure monetary policy is on the right track. He emphasized that interest rate decisions should be aimed at restoring price stability and ending the surge in inflation that has occurred in recent years.
According to Warsh, if monetary policy is implemented correctly, the surge in inflation of the past five years could be a thing of the past. This statement reinforces the message that the Fed is not ready to loosen its stance too quickly, even though the latest inflation data shows a slowdown.
As for the market, Warsh's comments could limit market optimism following lower-than-expected US CPI and PPI data. The dollar and yields are potentially holding back from further declines, while gold, stocks, and crypto remain sensitive to the direction of the Fed's future interest rate expectations. (arl)
Source: Newsmaker.id
