The US Federal Reserve has "no tolerance" for persistently elevated inflation, Chair Kevin Warsh said Tuesday, stressing that restoring price stability remains the central bank's top priority.
"The members of our committee have no tolerance for persistently elevated inflation," Warsh said in prepared testimony before the House Financial Services Committee.
"And we share a resolute commitment to restoring price stability," he added.
Warsh, who took office in May, said getting monetary policy right was the Fed's primary objective after US households faced elevated inflation for much of the past five years.
"If we get policy right — and we will — the inflation surge of the last five years will be a thing of the past," he said.
The Fed chair described the US economy as broadly resilient, saying the labor market remained stable, layoffs were limited and nominal wage growth was solid.
Warsh also highlighted a surge in business investment linked to artificial intelligence, including spending on data centers, equipment and software.
However, he said the extent to which the economy would benefit from the AI expansion remained unclear.
"New opportunities for the economy introduce new challenges for policymakers," he said, adding that the Fed was monitoring AI's potential effects on inflation and the labor market.
At its June meeting, the Fed kept its benchmark interest rate unchanged at a range of 3.5% to 3.75% for the fourth consecutive meeting.
New projections showed nine Fed officials expected at least one quarter-point interest rate increase this year, while nine anticipated either no change or a rate cut.
The new data showed Tuesday that the monthly inflation in the US fell 0.4% in June, registering the first monthly decline in six years, while the annual inflation eased to 3.5%, as the energy price increase slowed.
