Bloomberg Surveillance · Tuesday, July 14, 2026
Fed Chair Jerome Powell, in his prepared testimony, stated that the committee has 'no tolerance for persistently elevated inflation' and is committed to restoring price stability. This signals a focus on managing inflation expectations and maintaining the Fed's credibility, though the path forward depends on incoming data.
“The members of our committee have no tolerance for persistently anovated inflation, and we share a resolute commitment to restoring price stability.”
“So he is clearly saying the right things here in terms of keeping those inflation expectations anchored. Yeah, but at some point, if inflation does turn out to be more of a demand driven phenomenon above target inflation, if you have you know, several more years of that, know that, again, the risk is that you have inflation expectations that are starting to drift higher and the Fed does have to react, you know, I think they are, and I think Chairman Warsh is basically saying we're prepared to act if we need to, you know, but as of right now, at least with today's print. It does buy them a little bit more time to see a little bit more data and to maybe so clear up some of that ambiguity that we're seeing in terms of demand or supply related factors driving inflation.”