Warsh said today's CPI does not mean "mission accomplished" and the Fed will
firmly support a 2% inflation target; the Fed has "zero tolerance" for high
inflation, expects more limited inflation upticks, will review its inflation
framework and plans to eliminate tax provisions with inflationary effects. On
the balance sheet, any policy shift would be signaled well in advance to
markets; the Fed can begin seriously considering when to resume purchases of
Treasury securities. If challenged by Trump, he said he will "fulfill his
duties" and seeks to insulate the Fed from political interference. Long term, AI
implies substantial productivity gains and is broadly positive for the economy,
but he warned against complacency. On employment, price stability and full
employment are not mutually exclusive and he is committed to achieving both.
