Federal Reserve Chair Kevin Warsh told Congress on Monday that the surge in inflation over the last five years will become a thing of the past, pledging a shared, resolute commitment to restoring price stability as the central bank faces persistent price pressures above its 2% target since 2021.
Warsh, testifying before the House Financial Services Committee and scheduled to appear before the Senate Banking Committee on Tuesday, used the hearings to distance himself from the average inflation targeting framework adopted in 2020, calling it a mistake. He announced five task forces covering communications, technology, the balance sheet, economic data, and inflation. The Fed held its benchmark rate steady at 3.50%–3.75% at its June meeting.
Policymakers remain divided on the path forward. Half of the 18 officials surveyed expect at least one rate hike this year, and Governor Christopher Waller warned Sunday that further tightening may be necessary if stubborn inflation continues to weigh on the economy.