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Kevin Warsh won’t say if the Fed is done raising rates, even as he says the Fed has ‘no tolerance’ for high inflation and Trump pressure looms

Federal Reserve Chair Kevin Warsh said Tuesday that the Fed will make high inflation “a thing of the past,” yet he provided no signal about the central bank’s next steps. Fed policymakers “have no tolerance for persistently elevated inflation,” Warsh said in his first appearance before Congress since becoming chair May 22, replacing former chair Jerome Powell. “And we share a resolute commitment to restoring price stability.” Still, Warsh heads a sharply divided rate-setting committee, with about half of the 19 policymakers penciling in higher interest rates by the end of the year in forecasts released last month. Another half have signaled that they support keeping rates unchanged or even cutting them. Warsh faces a stiff challenge in reconciling the divided committee while navigating a rapidly-changing economic outlook. Warsh spoke to the House Financial Services Committee soon after the government reported that inflation fell 0.4% from May to June, driven down mostly by cheaper gas prices. Core inflation — which excludes the volatile energy and food categories — was unchanged last month, a broader slowdown in price increases than economists expected. Compared with a year ago, inflation dropped to 3.5% from 4.2% in May. Core inflation rose just 2.6% in June from a year earlier, down from 2.9% in May, a positive sign that higher gas costs haven’t yet lifted broader prices. Warsh, asked about the price figures, said they represented just one month of data and suggested he does not see inflation as defeated. “There might be some that look at this morning’s data and say, ‘mission accomplished,'” he said. “That is not my view.” In keeping with his stated policy of providing less guidance about the Fed’s policies, Warsh did not signal whether rate increases would be necessary to combat inflation. Warsh also cited the Supreme Court’s recent decision to allow Fed governor Lisa Cook to remain on the central bank’s board, thwarting Trump’s attempt to fire her for now, as a sign the high court sees the Fed as independent. “To the extent there were questions about it, the court has answered those questions,” he said.