Walsh reaffirmed his commitment to the 2 per cent inflation target, emphasizing the independence of monetary policy

On Tuesday, 14 July, at a hearing, Federal Reserve Chairman Walsh insisted on his commitment not to provide forward-looking guidance on interest rates, and the entire testimony almost failed to address interest rate policies. Walsh stated that the Fed was firmly committed to maintaining price stability and promoting the 2 per cent return in inflation, while stressing that the Fed had the policy tools it needed to achieve that goal. He said, “The more we focus on our own responsibilities, the more we stay away from politics.” Walsh added that the Federal Reserve would revisit its inflation framework in order to better understand the drivers of inflation and what measures could be taken to address it. Referring to the new working groups of the Fed, Walsh indicated that they were still at the research and exploration stage. He noted that the discussions would begin with 19 policymakers, that the process would be open and transparent and that research findings and policy ideas would be shared with the outside world on a regular basis. In terms of balance sheet policies, Walsh emphasized that balance sheets were part of monetary policy and not just the functioning of financial markets. Any balance sheet policy adjustment would be fully communicated, explained and given sufficient lead time to the market. When asked how Trump would respond if he tried to intervene in the Fed's policy, Walsh responded that he would continue to carry out his duties and maintain his independence in formulating monetary policy. He stated that the Fed had demonstrated its commitment to policy independence and institutional reform。