Warsh says Fed must burnish its institutional credibility to get policy right
Federal Reserve Chair Kevin Warsh said on Friday that the ‌US central bank must continually bolster its credibility to get monetary policy right, adding that that includes the supervision and operations side of the Fed.
Federal Reserve Chair Kevin Warsh emphasized on Friday the importance of the US central bank maintaining its institutional credibility to make sound monetary policy decisions. During an event at the International Monetary Fund and World Bank annual meetings, Warsh highlighted that the Fed's ability to print money is unique, but its credibility is of paramount importance.
According to Warsh, the foundation of the Fed's power rests on its institutional credibility, which was established by previous chairmen. He stressed that the Fed's success in getting policy right depends on its ability to enhance this credibility. Any slip-up or stumble in the Fed's supervision or payment systems would reflect on its institutional credibility, he added.
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