Delivering his inaugural address at the Jackson Hole Economic Symposium on Friday at 10:00 PM Beijing time, Federal Reserve Chair Kevin Warsh outlined a clear vision for monetary policy, marking his first major public appearance at the central bank's premier annual gathering since assuming office. Warsh reiterated the need for the Fed to reduce its reliance on "forward guidance," cautioning against overcommitting to a specific future path for interest rates. Instead, he argued, policy decisions should be more grounded in real-time economic data and long-standing policy principles.
Emphasizing that the 2% inflation target is a "clearly established and explicit objective," Warsh noted that while the U.S. economy remains fundamentally strong, inflation continues to run significantly above target. Consequently, he stressed that the current policy focus should remain firmly on ensuring price stability. The following is the full text of his prepared remarks.
Thank you. It is a pleasure to be here once again, and it is wonderful to see so many familiar faces. I have been looking forward to this weekend—and where better to mark my 100th day as Chair? For their incredible hospitality, we owe a debt of gratitude to Kansas City Fed President Jeff Schmid and his team. Jeff, thank you. Jeff and the other organizers have arranged some leisure activities for later today. I strongly advise you to choose your activities with great care. Over the years, I have learned that there are two very distinct ways to hike the trails around Jackson Hole. I can sum up my experience hiking with former Vice Chair Don Kohn in two words: I survived. Those determined, marathon-like "death marches" showed me a side of Don I was not prepared for. Then there is the other way to hike—which brings to mind my former colleague, former Fed Chair Ben Bernanke. Hiking with Ben is a far more leisurely affair; a gentle stroll along the winding paths of the Rockefeller Preserve. So, before you set out, please do a wellness check and ask yourself: "Is today a Kohn day, or a Bernanke day?"
The best part of this gathering is that it helps all of us clear our heads and think carefully about the world and the times we live in. For me, this venue and this audience are the perfect setting and the right group with whom to genuinely explore the most important ideas. Innovation is the theme of this conference. I believe the public and the markets—through their collective wisdom—understand that innovation in the Fed's approach to policy will help us achieve price stability while also fostering maximum employment. Let me briefly outline the main topics of this morning's speech. You could call it an outline... or a roadmap... but please, do not call it forward guidance. First, I will discuss some of the long-term questions the Fed is contemplating, including the latest general-purpose technology—artificial intelligence (AI)—and where it might take the economy. Then, I will touch upon the practice of forward guidance and the interaction between central banks and financial markets. Next, I will present some key principles that I believe should guide the implementation of monetary policy. Finally, I will share my assessment of the current economic situation.
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