Everyone Seems to Have Missed the 13 Most Important Words in Kevin Warsh’s Press Conference About Hiking Rates
The Federal Reserve raised its benchmark rate on Wednesday, and the morning-after story wrote itself. Reuters led with stocks pulling back after the Fed raised rates and pointed to another hike this year. Kevin Warsh said “the plain fact is…
The Federal Reserve raised its benchmark rate on Wednesday, and the morning-after story wrote itself. Reuters led with stocks pulling back after the Fed raised rates and pointed to another hike this year. Kevin Warsh said “the plain fact is that inflation is too high and has been for too long”, and that he would be hard-pressed to describe broad financial conditions as restrictive and that the Committee had “removed a dose of accommodation.” A UBS research note led by economist Jonathan Pingle called that phrasing much stronger wording than the market expected.
What most coverage skipped came in the final exchange. Jennifer Schonberger of Yahoo Finance asked whether the Fed now needs to push growth below potential and unintentionally push weakness onto the job market to bring inflation down. Warsh’s answer: “First, we believe that the ...