Federal Reserve Chair Warsh said on July 30 that financial markets have, on their own, started to price in expectations for tighter monetary policy even without fresh guidance from the central bank, but he stressed that this does not mean the Fed is obliged to follow traders’ or investors’ pricing.
Speaking at a press conference, Warsh said he was encouraged that, in the period between two meetings, markets adjusted not because of the Fed itself but because they independently reflected tighter financial conditions. He described that development as beneficial.
At the same time, Warsh drew a line between observing market moves and endorsing them. He said the Fed does not approve of or support any particular market direction, while adding that policymakers will continue to monitor market developments very closely. The remarks were carried by BlockBeats, citing Jin10.
Federal Reserve Chair Warsh said at a July 30 press conference that financial markets have already priced in expectations for tighter monetary policy without direct guidance from the central bank, but that does not mean the Fed must follow the pricing decisions of traders and investors.
Warsh said, “What is reassuring to me is that, in the period between the two meetings, the market did not reprice because of us, but instead reflected tighter financial conditions on its own.” He added, “I think that is a helpful development.”
He also said, “We do not endorse or support any particular market move, but I would say that we are watching market developments with a high degree of attention.”
The remarks were reported by BlockBeats, citing Jin10.
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