The Fed chairman opens the door to raising interest rates to control inflation

BarcelonaThe chairman of the Federal Reserve, Kevin Warsh, has insinuated without much specificity that there could be interest rate hikes. Not wanting to give too many clues about his future actions and advocating for a "more discreet" central bank, he admitted that controlling inflation will be a priority, during his intervention at the meeting of central bankers, politicians and academics held in Jackson Hole, Wyoming, USA.

Warsh, whose words were eagerly awaited by markets and analysts, assured that the Fed "has work to do" as long as inflation remains high, with the conflict with Iran still ongoing and high oil prices. "This is my criterion: we must be certain that underlying inflation is heading towards our target, clearly and at a sufficient speed. Otherwise, we have work to do. This is our job, our mandate, and our responsibility," he confirmed.

The highest responsible of the Fed, who replaced Jerome Powell last May, has shown his concern about the evolution of prices, situated at 3.6%, far from the 2% target. "None of the statistics (on prices) is perfect, but all point to a similar situation: inflation exceeds our 2% target. Therefore, the Federal Reserve should focus mainly on prices at this time," he maintained.

He assumed that the evolution of the general price level is "worrying", even though inflation data during the summer were better than expected. However, he added: "They do not indicate that underlying trends have significantly improved". Warsh, in any case, has not wanted to commit to any specific position, such as explicitly stating whether he will raise interest rates. "Today I present myself here committed to a discipline, not to a decision," maintained the one who was nominated by the US President, Donald Trump, who maintained a strong offensive against the previous Fed leader, Jerome Powell, to whom he demanded that he lower the cost of money.

During his speech, he maintained his strategy of a "more discreet" Fed. "Here I present a brief summary of what I will address in my speech this morning. You can call it an outline, you can call it a roadmap, but do not call it forward-looking guidance ("forward guidance)", he said. And he defended reducing the number of statements that could give markets clues about the Fed's decisions. The next meeting on the price of money will be on September 16.