US central bank: Autumn will be a monetary policy stress test for Kevin Warsh
The Fed Chairman has reversed the burden of proof. If inflation does not quickly move in a favourable direction, interest rates will have to rise. This is considered delicate in the run-up to the US midterm elections.
Federal Reserve Chairman Kevin Warsh delivered a speech in Jackson Hole that calmed market concerns about his previous unclear statements on monetary policy. His comments suggested a tighter policy stance, leading to increased expectations of an imminent interest rate hike and a rise in short-term bond yields. Warsh reiterated the Fed's preferred inflation measure, the Personal Consumption Expenditures (PCE) price index, and its target of 2% inflation. The markets responded positively, seeing his words as a show of resolve in fighting inflation.
Written by urgent.news from Handelsblatt's report — not a translation of it. Machine-written — may contain errors; check the original before relying on it.
