I=7
Fed Chair Warsh said inflation is running too high but avoids committing to a forward guidance or verbal cues about the Fed’s intentions
-
Fed Chair Kevin Warsh said inflation is running hot.
“While this summer’s PCE and CPI readings were better than expected, they do not tell me that underlying trends have meaningfully improved,” Warsh said in a speech at the Jackson Hole.
“We must be confident that underlying inflation is moving to our objective, clearly and at sufficient speed. Otherwise, we have work to do. That’s our job . . . our mandate . . . and our charge to keep,” He added.
-
Warsh avoided issuing forward guidance or verbal cues on the fed’s next steps.
“You can call it an outline . . . you can call it a trail map . . . just don’t call it forward guidance,” he pointed out.
-
He pointed out that the fed should try to avoid a scenario where market participants trade on the fed’s next move.
“And market participants will always try to anticipate what we will do next. But we should not indulge a regime in which market participants are looking primarily to the Fed for their next trade,” he said.
-
Warsh largely expressed confidence in the economy, saying it “appears to have strengthened.”
“For my part, today I am impressed by the overall performance of the economy, which appears to have strengthened,” he said.
“I would be hard pressed to describe broad financial conditions as restrictive,” he added.