Warsh Says He Won’t Pre-Signal October Fed Rate Decision

Federal Reserve Chair Kevin Warsh said he will not provide advance guidance on whether the US central bank will raise its benchmark interest rate this month. While reaffirming that last month’s increase was intended to restore price stability, he declined to say when another move might come.

Warsh made the remarks on October 16 during a discussion at the International Monetary Fund and World Bank annual meetings in Bangkok. “I won’t prejudge the outcome of any meeting,” he said. “It would be inappropriate to spell out in advance what action we will take at the remaining meetings this year.” He also did not offer a specific signal on whether the Federal Open Market Committee will raise rates or hold them steady at its October 27-28 meeting.

He also reaffirmed the rationale for last month’s rate increase. “When we raised rates in September, we made it very clear that we were seeking to achieve price stability and partially reverse accommodative monetary policy.” In his view, the principle of fighting inflation is separate from giving advance notice on rate decisions at individual meetings.

The Fed unanimously raised its benchmark rate by 0.25 percentage point at last month’s FOMC meeting, setting the target range at 3.75% to 4.00%. It was the first rate move since Warsh took office as chair.

Inflation data released afterward fueled debate over whether further tightening may be needed. The US consumer price index rose 3.7% in September from a year earlier. That exceeded market expectations for a 3.6% increase, fueling speculation in financial markets that the Fed could raise rates again this month.