Warsh vows to tackle inflation in first testimony as Fed chairman

Federal Reserve Chairman Kevin Warsh vowed to tackle inflation during his first congressional testimony as the central bank's leader on Tuesday, saying rising prices have placed an "undue burden" on American households and businesses.

"The members of our [Federal Open Market Committee] have no tolerance for persistently elevated inflation. And we share a resolute commitment to restoring price stability," he said Tuesday morning during a hearing in front of the House Financial Services Committee.

Warsh's comments came after government data released Tuesday showed inflation rose 3.5% annually in June, slowing from the previous month but remaining well above the Fed's 2% target. A global energy shortage sparked by the war in Iran caused prices to surge, leading to the highest inflation in more than three years in May.

During Tuesday's hearing, focused on the Federal Reserve's Semiannual Monetary Policy Report, Warsh is expected to face questions from committee members about the central bank's approach to inflation and interest rate cuts. 

Before Tuesday's inflation report, the Fed had signaled a somewhat more hawkish outlook. At last month's Federal Open Market Committee meeting, nearly half of policymakers projected they would support raising interest rates later this year. 

But June's cooler-than-expected inflation reading could signal that Fed officials will leave rates unchanged at their next meeting. Following the CPI release on Tuesday morning, the CME Group's FedWatch tool showed a 86% probability on Tuesday that the central bank would hold rates steady.