Kevin Warsh says US Fed has ‘no tolerance’ for inflation as prices cool in June

The news: Newly appointed US Federal Reserve chair Kevin Warsh told lawmakers the central bank would not tolerate high inflation, as fresh consumer price data showed price pressures easing but remaining elevated.

The numbers: Consumer prices fell 0.4% in June, the first monthly decline in six years, as fuel costs eased during the ceasefire with Iran. The annual inflation rate fell from 4.2% to 3.5%, but remained well above the Federal Reserve’s 2% target. Excluding food and energy, consumer prices were unchanged for the month and rose 2.6% from a year earlier.

The context: Warsh has emphasised his commitment to controlling inflation after other Fed policymakers warned that interest rates may need to rise. Last year, President Donald Trump pressed the central bank to cut rates and said he would not appoint a chair who disagreed that borrowing costs should be lower. Inflation has since accelerated due to higher tariffs, fuel prices, and surging investment in AI infrastructure.

What they said: “If we get policy right — and we will — the inflation surge of the last five years will be a thing of the past,” Warsh told lawmakers in a prepared statement.