Warsh Taking Hawkish Path to Lower Interest Rates

Fed Chair Kevin Warsh has often said that the members of the Federal Open Mouth Committee should talk publicly less often. He wants the Fed to follow the financial markets rather than the other way around. Yet, two weeks after his first press conference as Fed chair on Wednesday, June 17, he is scheduled to appear on a policy panel on Wednesday, July 1, at the annual ECB Forum on Central Banking.

Investors will be following closely what he has to say. They did the same during his presser. They heard him mention "price stability" eight times. In effect, he reiterated the final sentence of the June 17 FOMC statement: "The Committee will deliver price stability." In his prepared comments for his presser, he said, "We recognize that inflation has been running well ahead of the Fed’s long-stated inflation goal of 2 percent that’s been going on for more than five years."