Warsh Warns: No Tolerance for Inflation

Kevin Warsh, the newly appointed Chair of the Federal Reserve, has made it clear that he will not tolerate rising inflation. In a blunt statement to investors, Warsh said 'No tolerance' when asked about the Fed's stance on inflation. This statement is similar to the rhetoric used by previous Federal Reserve leaders throughout history, who have used interest rate movements as a key tool to tame inflation.

The Fed Funds Rate has been set at 3.6%, and there are now an equal number of members on the rate-setting committee who believe that rate hikes are imminent later this year, rather than further rate cuts. Warsh's leadership style is proving to be independent from politics, much like his predecessor Jerome Powell.

Inflation has been rising in recent months, reaching 4% in May and 3.5% in June. If inflation continues to accelerate, the Fed may raise interest rates to dampen a 'hot' economy. However, if inflation returns to its target of 2%, the Fed may lower interest rates instead.