Federal Reserve Chair Kevin Warsh told members of Congress on Tuesday that the US central bank remains fully committed to restoring price stability, stressing that the Federal Reserve will continue to operate within its statutory mandate and will not become involved in political matters. He also pledged greater transparency regarding the work of the Fed's internal task forces.

Warsh said interest rates and the balance sheet will remain the Federal Reserve's primary monetary policy tools, emphasizing that the balance sheet is an integral part of monetary policy rather than merely an operational instrument. He added that the responsibilities of several task forces, including those focused on the balance sheet and communications, will overlap, but stressed that their work will not be conducted behind closed doors. Their findings will be shared regularly with members of Congress through the end of the year.

The Fed chair also welcomed the central bank's decision to abandon its flexible inflation-targeting framework, arguing that allowing inflation to overshoot its target ultimately resulted in much stronger price pressures than policymakers had anticipated. He reiterated that the Federal Reserve is "capable of restoring price stability, and it will do so."

Warsh said the US economy remains strong and financial markets are functioning well, although he acknowledged that conditions in the housing sector appear more uneven. He noted that mortgage rates are now higher than in previous years, partly because inflation remains above the Federal Reserve's 2% target. However, he avoided describing current mortgage rates as excessively high, saying only that they are above earlier levels.

On the labor market, Warsh said conditions remain broadly stable, with job creation keeping pace with labor force growth. He added that the unemployment rate has remained low and largely unchanged over the past year, while layoffs have continued to decline.

The Federal Reserve chair declined to comment on questions related to the US president and the independence of regulatory agencies. He also refused to express an opinion on whether the president or other executive branch officials should be allowed to own companies or assets in industries they oversee as regulators.