US Federal Reserve (Fed) Chairman Kevin Warsh stated that the Fed has no tolerance for constantly high inflation and that they have a common determination to restore price stability.
The Fed published the text of Warsh's speech at the session held at the US House of Representatives Financial Services Committee on the semi-annual Monetary Policy Report.
Pointing out in the text that the Fed's number one goal is "to determine the monetary policy correctly, or as close to it as possible," Warsh said, "If we determine the policy correctly, which we will, the inflation increase of the last five years will be a thing of the past." he said.
Warsh recalled that he chaired the first Federal Open Market Committee (FOMC) meeting a month ago and emphasized that they were aware that high inflation was an unfair burden on American households and businesses.
Pointing out that although monthly price fluctuations are inevitable, especially in an unstable world, core inflation over longer periods of time is largely determined by monetary policy, Warsh said, "The members of our committee have no tolerance for persistently high inflation, and we share a common determination to restore price stability." He stated:
"The labor market is generally stable"
Warsh pointed out that his activities at the Fed require accurate reading of economic conditions, and noted that economic activity in the USA has shown resilience in the face of recent situations and is expanding at a solid pace.
Stating that they do not know to what extent the economy will benefit from artificial intelligence investments, Warsh stated that, as the Fed, they are monitoring its effects on inflation and the labor market.
Warsh emphasized that the country's labor market appears generally stable and said, "Employment creation is progressing at the same pace as the labor force. The unemployment rate is low and has changed little over the past year. We see relatively few layoffs, only a slight fluctuation in the vacancy rate, and solid growth in nominal wages." made his assessment.
"The goal of the working groups is to equip the Fed to make better decisions."
Stating that they have a duty to "look at existing practices with a new eye and move the institution forward" to ensure that they serve their goals, Warsh explained that they carry out this work systematically.
Reminding that they created an activity group in each of the five areas that are of central importance in maintaining monetary policy and that they included some of the best minds from inside and outside the economy, Warsh said, "The aim here is to equip the Fed to make better decisions in monetary policy and to leave these years of high inflation behind." he said.
Providing information about the working groups, Warsh noted that they have opened a new page at the Fed.