Fed Chair Kevin Warsh reaffirms 2% inflation target, signals no shift to higher tolerance

Federal Reserve Chair Kevin Warsh reaffirmed a 2% inflation target and signaled he sees no need for higher “tolerance,” despite President Donald Trump’s push for interest-rate cuts, according to Reuters. Speaking at a European Central Bank panel in Sintra on Wednesday, Warsh said anyone expecting the Fed to become comfortable with inflation above 2% would be disappointed. He offered limited forward guidance beyond reiterating the target and said monetary policy decisions will be made when central bankers “shut the door” for the next two-day meeting starting July 28. The remarks came two days after a U.S. Supreme Court ruling blocked Trump from dismissing Federal Reserve Governor Lisa Cook, reinforcing the Fed’s independence. Traders trimmed rate-hike expectations but still assigned about 70% odds of a September 15–16 increase.