Photo: LILLIAN SUWANRUMPHA / AFP / Getty Images
Federal Reserve Chairman Kevin Warsh stated that he will not speculate on future interest rate changes during the annual meetings of the International Monetary Fund and World Bank in Bangkok on Friday (October 16). Warsh emphasized the Fed's commitment to price stability but refrained from providing any hints about upcoming decisions. "We’re not in that business anymore," he said, according to NBC News.
The Fed recently raised its key interest rate to 3.9% in September, marking the first increase since 2023. Inflation, measured by the consumer price index, rose to 3.7% in September, prompting speculation about further rate hikes. Warsh acknowledged the impact of the ongoing AI boom on the economy, describing it as "probably the most important thing that’s happening in the global economy on the upside." He noted that AI could fundamentally change monetary policy and the real economy.
Warsh also mentioned that a Fed task force will hold a public hearing in November to study AI's impact on the labor market. Despite the challenges, Warsh expressed optimism about the U.S. economy's resilience, stating, "I believe, optimistically, you might think naively, at least in the U.S. we’re going to come out of this stronger," as reported by AP News.
The Fed's recent actions have defied President Donald Trump's calls for rate cuts. Trump has expressed support for Warsh but criticized the Fed's rate-setting committee. The Fed's next interest rate meeting is scheduled for October 27 and 28, following a "blackout" period where officials refrain from public comments.