Fed Chair Kevin Warsh says central bank has 'no tolerance' for elevated inflation

Fed Chair Kevin Warsh told lawmakers the central bank will not tolerate persistently elevated inflation and will take whatever steps are needed to preserve price stability. The message is implicitly hawkish, signaling a willingness to keep policy restrictive (and potentially raise the path of rates/yields if inflation remains high), which is likely to pressure rate-sensitive assets.

Analysis

Fed Chair Kevin Warsh told lawmakers the central bank will not tolerate persistently elevated inflation and will take whatever steps are needed to preserve price stability. The message is implicitly hawkish, signaling a willingness to keep policy restrictive (and potentially raise the path of rates/yields if inflation remains high), which is likely to pressure rate-sensitive assets.