BlockBeats News, July 15th. During his first appearance at a congressional hearing, Federal Reserve Chair Powell stated that the Fed has "zero tolerance" for persistent high inflation. He mentioned that the Fed's failure to keep inflation above the 2% target over the past five years was a dereliction of duty and that a single month of improved CPI data would not change the assessment.

Regarding monetary policy, Powell noted that the interest rate tool remains on the table as a policy option. In the future, the Federal Open Market Committee (FOMC) will discuss when and to what extent to use relevant tools to address inflation, but no forward guidance was provided on the future interest rate path. The market views this as the first public acknowledgement since Powell returned to the Fed in May this year that monetary policy tightening may be necessary.

Furthermore, Powell emphasized that the Fed will maintain its independence when formulating rate policy, free from political influence. He mentioned that the Fed has initiated multiple reform working groups to drive adjustments in economic analysis, policy formulation, and communication mechanisms, ushering in a "new chapter for the Fed."