WASHINGTON (AP) 鈥� New Federal Reserve Chair said Wednesday that the central bank would remain independent and seek to bring down inflation, likely foreclosing the rate cuts President Donald Trump has sought.
In remarks at a central bank conference in Sintra, Portugal, Warsh said that if businesses or households thought the Fed would accept inflation above 2%, 鈥淚 guess they’d be disappointed. We’re going to deliver price stability.鈥�
The Fed typically combats inflation by raising borrowing costs. When asked about Trump’s oft-repeated desire for lower rates, Warsh underscored the Fed’s independence from day-to-day politics.
鈥淲e鈥檝e been an for a very long time,” he said. “We鈥檙e going to be an at this moment and you鈥檙e going to see no changes to that.鈥�
Such comments suggest that Warsh has shifted his views since replacing Jerome Powell as chair May 22. He called for lower rates last year as he essentially campaigned for the job of Fed chair. Since becoming chair, however, Warsh has appeared to shift away from that stance and instead has signaled a focus on getting inflation down.
On Wednesday he declined to signal what steps the Fed would take to fight inflation, consistent with his opposition to so-called 鈥渇orward guidance,鈥� in which central bank leaders foreshadow their next policy moves.
鈥淭he tactics, the strategy, and the rest, that’s still to come,鈥� he said.
At his first news conference last month, Warsh also emphasized his goal of getting inflation back down to target. Wall Street investors expect the Fed could hike its key interest rate as soon as in September, from its current level of about 3.6% to roughly 3.9%.
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