Federal Reserve Chairman Kevin Warsh today said the public will “see no changes” in Fed independence and that prices remain “too high” but that inflation risks have come down.
Warsh took part in a central banker panel discussion at the European Central Bank Forum on Central Banking only two days after the U.S. Supreme Court rejected an administration request to allow President Trump to fire Fed Governor Lisa Cook. The chairman said that he read the high court’s decision, although he didn’t directly comment on the case.
“We’ve been an independent central bank for a very long time,” Warsh answered when asked if he would follow the president’s directives. “We’re going to be an independent central bank at this moment, and you’re going to see no changes on that.”
On rates, Warsh has been critical of the Fed in the past for allegedly overcommunicating, saying that financial markets work best when people pay attention to what’s happening in the economy rather than what the central bank says. Still, when pressed by the moderator, he said that prices are too high.
“I’ll say this: expectations of inflation over the first four weeks of this period have come down. Inflation risks have come down,” he said. “Again, in our business, we don’t want to overdetermine things, but if there were people in household or the business sector, or in the financial markets, who thought that this central bank was going to be comfortable with an inflation objective above 2%, I guess they’d be disappointed. We’re going to deliver price stability in the U.S.”
