Fed up with inflation, Fed again promises to deliver price stability in semiannual monetary policy report

The Federal Reserve once again vowed to deliver price stability and said it was prepared to ’act forcefully’ to keep a lid on longer-term inflation expectations.

The central bank’s comments were published on Friday in its monetary policy report, which is submitted semiannually to the U.S. Senate Committee on Banking, Housing, and Urban Affairs and to the House Committee on Financial Services. New Fed chair Kevin Warsh will be giving testimony to both committees next week.        

The report comes at a time when inflation has dominated the outlook for monetary policy. A spike in oil prices due to the Middle East conflict led to an inflationary shock for Americans in March, April, and May.

But a slide in crude prices back to pre-war levels at the end of June following an interim peace agreement between the U.S. and Iran rapidly eased inflationary fears. Those worries were reignited this week after the biggest escalation between the warring parties since the signing of their deal.