Warsh Faces Inflation Pressure as Core Rate Stays Above 2%

Fed Chair Kevin Warsh is facing mounting pressure to combat inflation, which has been stuck above the central bank's 2% target for over five years. According to the Fed's preferred measure, core inflation has risen since last December and remained around 3% or higher since 2023.

Warsh emphasized in congressional testimony that the Fed has 'no tolerance' for higher inflation and pledged to 'deliver price stability.' However, his tough talk raises expectations that he will follow through with action, current and former Fed officials say.

Some Fed officials, including Lorie Logan, president of the Federal Reserve Bank of Dallas, are growing impatient with inflation's stubbornness. They believe modestly higher interest rates would better balance the outlook.