Warsh promises to eliminate inflation "tax burden", Fed policy faces "system change"
Federal Reserve Chairman Kevin Warsh vowed to eliminate inflation once and for all while testifying before Congress on Tuesday, saying Inflation is an "unfair tax" imposed on American people and businesses, and the Fed plans to abolish this "tax" through "policy system changes." Warsh told the House Financial Services Committee’s semi-annual monetary policy hearing that the Fed’s top priority is to get monetary policy right and “if we get it right — and I guarantee you we will — the inflation surge of the past five years will be history.” He stressed that FOMC members have "zero tolerance for continued high inflation" and are firmly committed to restoring price stability. Less than two hours before the start of the hearing, the Department of Labor announced that the CPI in June rose 3.5% year-on-year, lower than expected, and the core CPI remained unchanged month-on-month. But Wash downplayed the significance of the improvement in single-month data and said bluntly, "Some people may say that the task is accomplished, but I don't think so." He said he would not "cherry out numbers" or declare "mission accomplished." Warsh criticized the Fed's past policy framework, especially the flexible average inflation targeting system adopted in 2020. "That central bank was not the first central bank to want a little more inflation but ended up getting more. That was a mistake." He announced that he had established five special working groups to comprehensively review the Fed's communication mechanism, balance sheet, data system, productivity and employment impact, and inflation policy framework, saying that only six weeks after taking office, it had "triggered a huge change in thinking." In terms of monetary policy independence, Warsh made clear his commitment to make independent decisions based on law and data, even under pressure from the White House. He did not give any forward guidance on the path of interest rates, continuing his consistent stance of rejecting "forward guidance" since taking office. Open a futures account on Sina's cooperative platform, safe, fast and guaranteed