Outsiders with major chops lead Fed task forces

Federal Reserve Chairman Kevin Warsh testified before the House Financial Services Committee on Tuesday, saying the Fed has no tolerance for persistently elevated inflation but declining to give clear guidance on whether interest rate hikes are coming. The testimony followed a Labor Department report showing the Consumer Price Index up 3.5% over the prior 12 months (2.6% excluding food and energy), down from May's pace, with the decline attributed partly to falling energy prices tied to a temporary truce in the Iran war. Fed governor Christopher Waller said Monday there is still a credible case for inflation to fall back to the 2% goal, but also a plausible case it could remain elevated or rise, which would require tighter policy, with a decision possible at the Fed meeting concluding July 29. Separately, U.S. Central Command forces began a new wave of strikes against Iran at 6 a.m. ET, targeting military capabilities used to attack shipping in the Strait of Hormuz.