Federal Reserve Chair Warsh says that even though PCE and CPI data released this summer came in better than expected, it has not convinced him that the underlying trend in inflation has meaningfully improved. He notes that market pricing reflects confidence the Fed will achieve price stability, and assures that market judgment is correct. Warsh adds that with inflation above 2%, the Fed's primary focus should be on prices. His closely watched remarks coincide with criticism of his streamlined communication style, which economists and market participants believe lacks clarity on the near-term outlook for the economy and monetary policy. The speech appears to answer those concerns, as Warsh offers a more detailed than usual account of his views on the economy and the Fed's priorities under his leadership. He emphasizes that price stability will not occur automatically and inflation may not return on its own; achieving price stability is the Fed's responsibility. It is expected that Warsh will not take questions from central bank officials and economists at the event.
ChainCatcher News: Federal Reserve Chair Warsh said that although PCE and CPI data released this summer came in better than expected, they did not convince him that the underlying trend in inflation had shown meaningful improvement.
「Market prices reflect the market's belief that we will achieve price stability. I can assure you that the market's judgment is correct,」 Warsh said. He added that with inflation above 2%, the Fed's 「primary focus at this point should be prices」.
The closely watched remarks come amid criticism of Warsh's streamlined communication strategy. Economists and market participants argue that the approach lacks clarity on the near-term economic and monetary policy outlook. His speech appeared to respond to those concerns, as he went into more depth than usual about his views on the economy and the Fed's priorities under his leadership.
「Let us also be clear about another aspect of the goal: price stability will not happen automatically, and inflation is not guaranteed to return on its own. Achieving price stability is the Fed's responsibility,」 he said. It is expected that Warsh will not answer questions from central bank officials and economists on site.
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