Kevin Warsh Said the Fed Has "No Tolerance" for Inflation and Is Charting a "New Course" on Monetary Policy. J.P. Morgan Analysts Expect Rates to Hold Steady Through 2026.
The Fed has a dual mandate, but it seems pretty clear that it's only focused on inflation right now.
Overview
Kevin Warsh made his first appearance before Congress as the new Federal Reserve chair this week. He sent a fairly clear message about inflation. What he didn't do, however, is offer any clear signals about the central bank's outlook or what it might do with interest rates moving forward.
Here are four takeaways from Warsh's latest commentary, along with what J.P. Morgan's research team had to say about it.
Perhaps Warsh's sharpest comment came when he told committee members that the Fed has "no tolerance for persistently elevated inflation" and shares "a resolute commitment to restoring price stability." If the Fed has a dual mandate, it seems pretty clear that he's only focused on one of them right now. But just as he didn't offer his own dot plot projection, he also didn't offer clues to whether or when the Fed might make a rate change. The takeaway is that investors shouldn't expect clear signals from the Fed going forward.
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Source
Originally published at www.fool.com.