Aug. 28 (UPI) — Economists and financial markets will be watching closely on Friday when the Federal Reserve Chairman Kevin Warsh delivers a keynote address at the central bank’s annual symposium in Jackson Hole, Wyo.
Federal Reserve chairmen often use the speech to discuss monetary policy initiatives on a broad level, including offering insight into future interest rate plans. Since being appointed chairman in May, Warsh has been scant with details on future policy decisions and Friday’s address is expected to be more of the same.
The U.S. economy continues to face inflation pressures with inflation rates well above the Federal Reserve’s 2% annual target. Under Warsh, inflation markers have moved higher yet while the Federal Open Market Committee has maintained its benchmark interest rates at 3.5% to 3.75%.
Some members in the central bank are calling for another hike in interest rates, which would be a first since July 2023.
“If I had to guess, I would say that he’s going to give a very high-level, broad look at the work of the task forces and how he thinks the Fed should operate, as opposed to a nuts-and-bolts assessment of the economy and expectations for policy,” Luke Tilley, chief economist at M&T Bank and Wilmington Trust Investment Advisors, told CNBC.
Warsh has established five task forces that are reviewing how the Federal Reserve approaches its policy decisions, including its use of data, technology including artificial intelligence, and its balance sheet.
The Federal Open Market Committee did not meet in August. Its next meeting is on Sept. 15 and 16, during which it will decide whether to hold interest rates firm or make adjustments.
After Warsh’s address following last month’s FOMC meeting, yields for long-term bonds rose. This happens when bond traders are skeptical that the central bank will cool inflation.
