Fed Chair Warsh Declines to Signal July Rate Decision, Labels Inflation as "Too High"

Federal Reserve Chair Kevin Warsh, speaking at the European Central Bank's central banking forum on Wednesday, declined to offer any hints regarding potential actions at the central bank's upcoming meeting later this month, although he did note that inflation remains too high.

Participating in a roundtable discussion in Sintra, Portugal, Warsh stated: "We are all committed to price stability. It may not be our only responsibility, but if there's one consensus from the past few days, it is to remain open-minded on issues of artificial intelligence and productivity. However, we all look around and see that prices truly are too high."

The new Fed Chair also mentioned that the partial roster of personnel for the five special task forces he announced last month, established to examine various Fed functions, will be released next week.

Warsh added: "My hope, or my wish, is that in nine to twelve months, we will be able to utilize new technology to understand what is happening in the real economy in real-time, which can enable us as policymakers to make better decisions."

Aside from Warsh, the discussion panel also included European Central Bank President Christine Lagarde, Bank of England Governor Andrew Bailey, and Bank of Canada Governor Tiff Macklem.

This marked Warsh's first public remarks since his confirmation in May, apart from the post-meeting press conference two weeks ago. The Fed has held interest rates steady this year, with policymakers weighing the persistence of inflation against other economic factors.

A key component of Warsh's reform agenda for the Fed revolves around how the institution utilizes data in its policy decisions. The Chair expressed his desire for the central bank to adopt a fundamentally different approach within a year.

Warsh said: "My hope, or my wish, is that in nine to twelve months, we will be able to utilize new technology to understand what is happening in the real economy in real-time, which can enable us as policymakers to make better decisions."

Warsh has long been critical of the traditional data tools provided by government agencies. He remarked that "conventional wisdom" is his least favorite data point.