Warsh: "Fed independence means staying in our lane... We will achieve price stability"

[Financial News] Kevin Warsh, chair of the Federal Reserve System (Fed), emphasized the Fed's commitment to price stability on the 16th (local time), stating, "Inflation is too high and has lasted too long."
At a press conference held after the Federal Open Market Committee (FOMC) meeting that day, Kevin Warsh said, "Today's policy action will contribute to bringing inflation back to the Committee's (Fed's) 2% target in a more timely manner," adding, "Our Committee will achieve price stability."
At the FOMC meeting that day, the Federal Reserve System (Fed) raised its benchmark interest rate by 0.25 percentage points to 3.75–4.00%.
Kevin Warsh said, "As I stated at the Jackson Hole Policy Symposium, it is difficult to view overall financial conditions as contractionary," adding that "this view was widely shared within the committee."
He said, "Therefore, we have removed some of the easing measures," adding, "This is to ensure that financial and credit conditions are more aligned with our ultimate goals."
While assessing the U.S. economy as robust, Kevin Warsh repeatedly emphasized the severity of inflation.

He assessed, "Today's decision was made at a time when the U.S. economy appears to be strengthening," adding, "Indicators such as new hiring, private-sector income, and corporate capital investment have improved in recent months and are pointing in a positive direction."
He added, "However, inflation has exceeded the target for over five years," and explained, "The clear fact is that inflation is too high and has persisted for too long."
He also pointed out that "individual data indicators such as the Consumer Price Index (CPI) and retail sales contain a lot of noise (irregular fluctuations)," and that "reliance on data indicators is a dangerous obsession." He went on to emphasize that "what matters is the trend."
Regarding President Donald Trump's pressure to cut interest rates, he stated, "I have nothing to say about discussions with the President," but emphasized, "Those in the most difficult circumstances are the ones who stand to benefit the most from price stability. Today's decision was the right one to fulfill the mission Congress assigned to ensure price stability."


In response to repeated questions regarding President Donald Trump's remark that he would cut off trade with certain countries if the Fed did not lower interest rates, he said, "Part of the Federal Reserve System's independence lies in staying in our lane."
He went on to say that "independence is a two-way street." A two-way street refers to a relationship where both parties bear mutual obligations and engage in give-and-take. It can also be interpreted as a metaphor indicating that President Donald Trump's pressure is not being enforced unilaterally.
Kevin Warsh said, "We will let those dealing with trade and fiscal policy stay in their own lanes," adding, "This is exactly how we can stand here and speak about the situation as we see it."
He cited three reasons for the rise in long-term U.S. Treasury securities: the strength of the U.S. economy, financing competition among hyperscalers (large-scale data center operators), geopolitical risks, and pressure on energy and raw materials.

[email protected] Lee Seok-woo, International Specialist Reporter