Federal Reserve Chairman Kevin Warsh said he won’t prejudge the central bank’s decisions on interest rates at upcoming meetings in October and December. Warsh’s comments came during a discussion with International Monetary Fund Managing Director Kristalina Georgieva in Bangkok.
This move aimed to curb spending and ease price pressures amid persistent U.S. inflation. Warsh emphasized the Fed’s commitment to price stability but avoided signaling future actions.
“At the Federal Reserve, we made very clear that we would deliver price stability, and we removed a dose of accommodation about a month ago,” Warsh said. “I don’t prejudge meetings. I don’t believe in saying now what I might do at the meetings that we have in the balance of this year.”
The September rate hike contrasted with President Donald Trump’s calls for rate cuts. Trump criticized the Fed’s rate-setting committee but expressed support for Warsh, whom he appointed earlier this year.
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Global price surges are a central concern for financial leaders in Bangkok. Minutes from the Fed’s recent meeting indicate most officials expect another rate increase this year, which would raise borrowing costs for mortgages, car loans, and credit cards.
Warsh highlighted the artificial intelligence investment boom as a factor driving inflation. The Fed’s task force on AI-related issues will meet on November 16. “I’d say the advent of this new technology is probably the most consequential change to the U.S. and the global economy in my lifetime to this point,” he said.
While acknowledging AI’s potential to benefit the global economy, Warsh noted its role in current inflationary pressures. He also sees AI as a valuable tool for Fed economists, who often rely on lagging data to predict trends.
“We torture data with old-fashioned models to try to find out what’s underlying inflation trends,” Warsh said. “Not so long from now, it won’t be torture. We will have access at the fingertips of central banks to all the information in the world, and we’ll be able to use new analytical tools to distill that data.”
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