Warsh Warns: No Tolerance for High Inflation

Kevin Warsh, Chair of the Federal Reserve, has made it clear that there will be no tolerance for high inflation. In an interview, he stated bluntly, 'No tolerance.'

This stance reflects a long-standing policy at the Fed, which has consistently raised interest rates to combat inflationary pressures when they rise above target.

Warsh's comments come as inflation accelerates in the US, reaching 4% in May and 3.5% in June. This has sparked debate among Fed members about whether to raise or lower interest rates in the coming quarters.

The Federal Reserve Funds Rate is currently at 3.6%, with an equal number of committee members advocating for rate hikes versus further rate cuts. If inflation continues to rise, Warsh and the committee are likely to increase interest rates to dampen a 'hot' economy.