In his prepared remarks, Warsh said policymakers at the central bank have no tolerance for high inflation, reiterating a vow to tame price growth that has been elevated for five years. 

"The members of our committee have no tolerance for persistently elevated inflation," Warsh said Tuesday in testimony he's scheduled to deliver before lawmakers at 10 a.m. "And we share a resolute commitment to restoring price stability."

The new Fed chairman has emphasized policymakers' commitment to tackling inflation since he took office in May, and said the number one objective is to get monetary policy right: "If we get policy right — and we will — the inflation surge of the last five years will be a thing of the past," Warsh said. 

As Bloombgerg notes, Warsh's remarks before the panel come amid warnings from several other Fed policymakers that higher interest rates may be needed to curb inflation, especially in the context of soaring memory prices.

Warsh was upbeat on the overall economy, describing the labor market as broadly stable with few signs of layoffs and solid nominal wage growth. The Fed chief was more circumspect on the artificial intelligence boom, which he said is driving a surge in business investment but also posing uncertainties for the economy.

"We don't know the extent to which the economy will benefit from the AI build-out. Yet it seems inevitable that what is now called "AI investment" will soon be called just "investment." Even so, new opportunities for the economy introduce new challenges for policymakers. We at the Fed are monitoring the implications for inflation and the labor market." Warsh said.

"New opportunities for the economy introduce new challenges for policymakers. We at the Fed are monitoring the implications for inflation and the labor market."

Minutes of the Federal Open Market Committee's June 16-17 meeting reflected growing concern among policymakers over inflation just as worries over the labor market slightly receded. New rate projections released alongside that decision showed nine officials foresaw at least one quarter-point hike this year, with six anticipating at least two. Another nine expected no move or a cut. Warsh, who has been critical of so-called forward guidance that offers clues on the path for rates, declined to submit a forecast.

The testimony was prepared prior to the Bureau of Labor Statistics' release of fresh inflation data that showed consumer prices declined in June for the first time in six years and a key gauge of underlying inflation was little changed. As noted earlier, headline CPI fell 0.4% from May, mostly reflecting a slump in energy prices amid a pause in the US and Iran war. However, a resumption of hostilities has since sent oil prices surging again with Brent crude topping $87 a barrel for the first time in a month and threatens to push inflation sharply higher again. Core CPI, which excludes volatile food and energy components, was flat. On a year-over-year basis, core prices increased by a slower-than-expected 2.6%.