Summary
- Fed Chair Kevin Warsh said the core of the inflation framework review is analyzing the causes of inflation.
- Warsh said there is no reason to revisit the Fed’s 2% inflation target, making clear that the current goal will remain in place.
- Warsh ruled out providing guidance on future monetary policy, stressed a data-dependent approach, and signaled that curbing inflation will remain the top priority.
Forecast Trend Report by Period
Kevin Warsh, chair of the Federal Reserve, said the centerpiece of the central bank’s ongoing review of its monetary policy framework is identifying the causes of inflation.
At a press conference after the FOMC meeting on June 17, Warsh said the framework review is focused on the factors that drive price increases.
He also made clear the Fed has no plans to revisit its inflation goal. Warsh said he sees no reason to review the central bank’s 2% target and indicated it will remain in place.
On the policy outlook, he said the Fed cannot provide any guidance on what it will do next.
Warsh said current monetary policy appears restrictive for the housing market, but not for financial markets more broadly.
That suggests higher interest rates are clearly weighing on housing, while risk appetite and liquidity remain intact across financial markets.
Markets are interpreting the remarks as a sign the Fed will keep fighting inflation as its top priority after Warsh ruled out forward guidance and reaffirmed the 2% target.
JH Kim
reporter1@bloomingbit.ioHi, I'm a Bloomingbit reporter, bringing you the latest cryptocurrency news.