1 week ago
Warsh Says Persistent Inflation Keeps Fed Focused on Prices
The Federal Reserve raised interest rates by a small amount.
Chair Kevin Warsh said prices have been rising too quickly for too long.
He wants to see stronger evidence that inflation is moving toward the Fed’s target.
Recent inflation reports did not give him enough confidence.
Warsh said the Fed will study new economic information before making its next decision.
He did not promise that rates would rise or fall next.
The Fed cannot directly control prices for oil or food.
It can try to stop temporary price increases from spreading through the wider economy.
The Federal Reserve raised interest rates by 25 basis points on Wednesday.
Chair Kevin Warsh said inflation has remained above target for more than five years.
Warsh said recent CPI and PPI data showed insufficient improvement in underlying inflation.
He declined to provide forward guidance, saying future decisions would depend on incoming data.
Warsh defended Federal Reserve independence and said stable prices particularly benefit lower-income Americans.
- Who
- The Federal Reserve and its chair, Kevin Warsh, made the policy decision and explained it.
- What
- The Federal Reserve raised interest rates by 25 basis points while maintaining a strong focus on reducing persistent inflation.
- Where
- The decision concerns monetary policy in the United States.
- When
- The decision was announced on Wednesday; the article does not provide a calendar date.
- Why
- Warsh said inflation had remained above target for more than five years and recent data did not show sufficient improvement.
Key facts
- Rate decision
- The Federal Reserve raised interest rates by 25 basis points.
- Inflation concern
- Warsh said inflation has been above target for more than five years.
- Recent data
- Warsh said summer inflation readings did not show meaningful improvement in underlying trends.
- Next policy move
- Warsh provided no forward guidance and said decisions would depend on incoming data.
- Price shocks
- He said the Fed cannot directly control individual oil or food prices.
- Fed responsibility
- Warsh said the Fed should prevent temporary price changes from producing broader economic effects.
- Independence
- Warsh said the Federal Reserve should stay focused on its congressional mandate.
Quotes
Kevin Warsh
Chair of the Federal Reserve
“What we can do and will do is ensure that any change in relative prices don't broaden out, don't have second and third order effects in the economy.”
firstpost.com
“The plain fact is that inflation is too high and has been for too long.”
firstpost.com
Sources
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