On Tuesday (July 14), during the US trading session, Federal Reserve Chairman Warsh testified before the House Financial Services Committee on the semi-annual monetary policy report, once again demonstrating his firm commitment to price stability. He emphasized that the Fed has "zero tolerance for persistent high inflation" and clearly stated that even with the relatively strong June CPI data released that day, the mission is far from over. This statement quickly became the focus of the market, highlighting its unwavering stance against inflation. Wall Street Journal reporter Nick Timirao believes that when asked about the June CPI data, Warsh responded, "It's just a data point... I don't want to over-interpret or pick and choose data. Some people might see this morning's data and say, 'Okay, job done, everything's fine.' That's not my opinion." This statement directly dampened some market expectations for easing policies and reinforced his hawkish tone. Inflation is a "choice," and the Fed won't shirk responsibility . In his testimony, Warsh stated bluntly, "Inflation is a choice." He pledged that the Fed "will not shirk responsibility," will fully commit to price stability, and has the tools to achieve its 2% inflation target. "If we get policy right—and we will—the inflation surge of the past five years will be a thing of the past." He emphasized that underlying inflation is determined by monetary policy in the long term, and there is still work to be done. Controlling inflation will help lower long-term Treasury yields and make mortgages more affordable. This hawkish stance is consistent with Warsh's overall style. He repeatedly mentioned the Fed's "zero tolerance" for high inflation and pointed out that current high mortgage rates are partly due to excessive inflation. Markets and media generally believe that these remarks reflect his core view on inflation: it is not an uncontrollable external force, but a controllable result of policy, and must be resolutely corrected. Strong Economic Resilience, AI Investment a Highlight but Needs Monitoring Despite emphasizing inflationary pressures, Warsh maintains a relatively optimistic view of the fundamentals of the US economy. He points out that economic activity is expanding at a steady pace, demonstrating resilience: household consumption is growing moderately, manufacturing output is rising steadily, the labor market is generally stable, employment and labor force growth are balanced, nominal wage growth is robust, and layoffs are few. Most notably, he focuses on artificial intelligence (AI). Warsh states that business investment is accelerating, primarily reflecting AI projects and high-tech spending (high-tech spending grew at an annualized rate of nearly 25% in the first quarter). Productivity growth was already strong before the widespread adoption of AI, and he emphasizes that "we are not afraid of productivity-led growth," and the Fed's dual mandate (price stability and full employment) is not contradictory. However, he also remains cautious, noting that the extent of AI's benefits to the economy is unknown, and the Fed is monitoring its potential impact on inflation and the labor market. Balance Sheet Reform and Policy Independence Warsh views the Fed's balance sheet as an important component of monetary policy, rather than simply a "pipeline project." Any policy adjustments will be announced in advance, fully explained, and communicated to the market. He also reiterated that the Fed must stay away from fiscal policy and commit to independent monetary policy, demonstrating its commitment to independence and reform through action. To promote long-term improvement, Warsh announced the formation of several task forces to examine issues such as the inflation framework, balance sheet, communication methods, data use, and productivity from scratch. The task forces will first share their views with 19 policymakers, followed by public discussions. These initiatives aim to help the Fed better achieve its goals and avoid repeating the mistakes of past high inflation. Furthermore, Warsh explicitly stated that the Fed "does not want to engage in the bailout business," including in areas such as cryptocurrencies. Overall Impression: Hawkish Stance Continues, Reforms Go Hand in Hand Warsh's score at this hearing was in line with historical averages, signaling a robust anti-inflation stance rather than further radicalization. It can be seen that Warsh demonstrated both strong policy resolve and a focus on pragmatism and long-term reform. In the current environment, this statement helps anchor market expectations: the Fed will not relax its stance based on a single instance of good data and will continue to monitor multiple indicators. The future progress of the task forces and subsequent FOMC meetings will further reveal the policy path of the Fed under Warsh's leadership. Warsh's remarks conveyed a clear message—the Federal Reserve is committed to prioritizing price stability while creating conditions for economic resilience and technology-driven growth. This is not merely a short-term statement, but a concentrated reflection of its monetary policy philosophy. Warsh's testimony scored 7/10 on FXS Speechtracker (historical average), and the Fed sentiment index remained in hawkish territory. Reactions on social media platform X largely focused on his anti-inflation resolve, with some saying it "didn't sound like a rate cut or money printing." Some analysts believe this marks a new era for the Fed: less forward guidance, a greater emphasis on first principles, but its independence facing political challenges.