Kevin Warsh finally threw Wall Street some crumbs on what he's thinking: ‘There is one signal nobody can miss: 65 months of elevated inflation'
Fortune Eleanor Pringle
Kevin Warsh used his July press conference/speech to emphasize that the Fed should avoid overcommitting to interest-rate paths and to stress price stability over employment in its mandate. He said inflation is running above target, citing the 12-month PCE measure at 3.7% (and 6-month at 4.1%). His remarks appear to have nudged markets slightly lower during the speech and framed AI as a new variable the Fed will analyze with a productivity-and-jobs task force, but the main policy takeaway is heightened focus on inflation data.
Why it matters
But make no mistake: "We should not indulge a regime in which market participants are looking primarily to the Fed for their next trade."
