Summary
- Warsh said inflation risk has eased and inflation expectations have declined over the past four weeks.
- Warsh said volatility has fallen and yields have also moved lower, but prices remain too high and the Fed will not be satisfied with inflation above 2%.
- Warsh said the Fed will remain an independent central bank and that the AI revolution will create more jobs and strengthen prosperity.
Forecast Trend Report by Period
Kevin Warsh, chair of the Federal Reserve, said inflation risks have eased.
Walter Bloomberg reported on July 1 that Warsh made the remarks during a panel discussion at the Sintra Forum, often described as Europe’s version of Jackson Hole. Inflation expectations have fallen over the past four weeks, he said. Market volatility has declined, and yields have moved lower.
He also underscored continued concern about price pressures. The Fed has reviewed the situation and still sees inflation as too high. Anyone who thinks the central bank will be satisfied with inflation above 2% will be disappointed.
Warsh also addressed the Fed’s independence, in comments seen as pushing back on speculation that President Donald Trump’s views could shape future rate decisions. The Fed will remain an independent central bank, he said, and that independence has not changed.
On artificial intelligence, Warsh said he has serious questions about its effect on the labor market. The economy is only in the first or second inning of the AI revolution. He added that AI will create more jobs and strengthen prosperity.
JOON HYOUNG LEE
gilson@bloomingbit.ioCrypto Journalist based in Seoul