WASHINGTON: US Federal Reserve Chair Kevin Warsh said Wednesday the central bank was committed to fighting “too high” prices, as inflation fuelled by the US war on Iran surges through the world’s largest economy.
“We’ve all looked around and we’ve seen that prices are too high, and I don’t think I’m the only one on this stage that’s recommitted to deliver price stability,” Warsh said at a forum in Portugal, sitting alongside fellow major central bank heads.
“We’re going to deliver price stability in the US. That’s what this committee has signed up to do,” he said, referring to the Federal Open Market Committee that sets interest rates.
Chairing his first FOMC meeting last month, Warsh had delivered a similar message, with his fellow policymakers suggesting a rate hike may come later this year to combat inflation.
The Fed has a dual mandate of keeping inflation to a long-term two-percent target while also ensuring maximum employment.
Price increases, however, have been far above that level since the pandemic, peaking at nine percent in 2021.
Inflation trended down after that peak, but the US central bank paused its rate-cutting cycle in January as price volatility fuelled by US President Donald Trump’s tariffs and unpredictable economic policy rippled through the economy.
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