Warsh Says Fed Independence, 2% Inflation Target Will Hold
By CU Today Staff —
SINTRA, Portugal—Federal Reserve Chairman Kevin Warsh used his appearance at the European Central Bank Forum on Central Banking to stress that the Fed will remain independent and committed to its 2% inflation target, even as President Trump continues pressing for lower rates, according to Reuters.
“If people thought this central bank was going to be comfortable with an inflation objective above 2%, they would be disappointed,” Warsh said during the panel here, according to Reuters.
Asked whether that disappointment might include Trump, Warsh said the Fed has “been an independent central bank for a long time” and that there will be “no changes on that.”
The appearance came two days after the Supreme Court refused to allow Trump to fire Fed Governor Lisa Cook, with Reuters reporting the court said the president would have to clear a “substantial threshold” to remove her. Warsh said he had read the decision but did not directly comment on Cook’s case, saying instead that it would not change how the Fed conducts its business.
Warsh also declined to preview the Fed’s next move on rates, telling the panel he would not provide forward guidance and saying policymakers would decide when they “shut the door” at their July 28 meeting, Reuters reported.
The Associated Press reported Warsh said the “tactics” and “strategy” for reaching the inflation goal are “still to come,” while also noting signs that inflation expectations have moderated.
Originally reported by CU Today.