Fed Chair Kevin Warsh Said the Central Bank Has “No Tolerance” for Inflation, and the Dow Dropped 840 Points.
What It Means for Your Portfolio
Federal Reserve Chairman Kevin Warsh just presided over his second meeting in his new job, and he’s maintaining current interest rates, no hikes or cuts. The most recent inflation data show lower inflation, and some interest rates, like mortgage rates, have climbed on their own without help from the Fed. Warsh says that’s the market doing its job.
However, he reiterated in a session with Congress that he and his committee “have no tolerance for persistently elevated inflation.” He upheld his approach of not providing forward guidance, but the implication is that if necessary, the Fed will raise rates. That sent the Dow Jones Industrial Average (DJINDICES: ^DJI) down 840 points in one day. The DJIA is an index of 30 of the largest, most important stocks in the market, and its performance reflects broader market trends.