Kevin Wash, Chair of the U.S. Federal Reserve, stated that while inflation is easing, the battle against rising prices is not over. He refrained from commenting on future interest rate directions and affirmed the Fed's commitment to maintaining its independence despite political pressures.
According to Reuters, during a House Financial Services Committee hearing on July 14, Wash said, "The Fed will not tolerate persistently high inflation," adding, "We have a strong commitment to restoring price stability."
He emphasized the need to manage monetary policy correctly to make the price surges of the past five years a thing of the past. He also reiterated the Fed's role in not only ensuring price stability but also maintaining stable employment.
In response to the recently released U.S. consumer price index, which showed a faster-than-expected decline, Wash expressed caution. He remarked, "Some may say 'mission accomplished,' but I see it differently; there is still work to be done regarding inflation."
However, he did not provide answers on whether interest rates need to be raised again or when rate cuts might begin, indicating that decisions would be based on upcoming inflation and employment data.
Wash drew a line against pressure from President Donald Trump regarding interest rate cuts. When asked how he would respond if lawmakers demanded monetary policy that diverges from economic indicators, he stated, "I will adhere to the law and follow the indicators to make the best judgment."
He affirmed that even if President Trump or his aides directly pressured him, he would continue to perform his duties. In response to a question about working for Trump, he emphasized, "The Fed is an independent agency, and it is an honor to work independently."
The Fed also plans to revise its operations by the end of the year. It is reviewing five areas: communication with the market, the size of its asset holdings, economic indicator analysis, productivity and employment, and price measurement.
Wash stated, "If we change the size and management of assets held by the Fed, such as government bonds, we will provide ample explanation to Congress and the financial markets in advance." He also indicated that the Fed would be more cautious in its communications to prevent the market from anticipating interest rate directions too far in advance.
* This article has been translated by AI.
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