US Fed Chair Kevin Warsh offers no signal on October interest rate decision

US Federal Reserve Chair Kevin Warsh declined to signal the country's central bank's next move that would be taken later this month.

He was speaking during a Fireside Chat with International Monetary Fund (IMF) Managing Director Kristalina Georgieva in Bangkok on Friday October 16.

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"I don't believe in pre-judging Fed meetings...." ​ ​"At the Fed, we made clear that we would deliver price stability"

Kevin Warsh

 

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His comments came days before policymakers decide whether to raise interest rates again. He spoke as part of the weeklong IMF-World Bank Annual Meetings.

Warsh said the world had behaved as the Fed expected since its September meeting. "Since the September FOMC meeting, the world has broadly conformed to our expectations," he said.

He added that rising prices were a global issue, not just a problem for the United States. Warsh said that most countries had tightened monetary policy around the same time, meaning no country could avoid the effects.

Describing an "investment surge" as the most important upside development in the global economy, crediting good policies, he said that "Right now, we have structural growth, an investment surge."

Warsh on Artificial Intelligence

Warsh warned that artificial intelligence (AI) would reshape demand first. "AI is going to hit the demand side of the economy before the supply shock," he said.

He expected the technology to make the economy more productive and create more wealth, but said the path would be bumpy and the near-term impact on jobs remained uncertain.

The US Fed will hold a field hearing on AI in the San Francisco Bay Area, a month later on November 16.

Warsh's Comments Build On Last Month's Fed Rate Hike

The US Federal Reserve had last month raised rates to a range of 3.75% to 4% which marked its first increase since 2023.

Two weeks ago, senior officials who advised Warsh signalled the bank was in no hurry to raise rates again, and bets on an October rise tumbled according to a CNBC report.

September inflation data, however, came in firmer than expected. Core consumer prices, which exclude food and energy, rose 0.33%, the second straight firm monthly reading.

The Fed's communication blackout began on Friday, and its next meeting runs on October 27 and 28, less than a week before the the country's midterm elections.

With agencies inputs