Svmuu News: Federal Reserve Chair Warsh reiterated his commitment not to provide forward guidance on interest rates during a hearing on Tuesday, with his testimony making almost no mention of interest rate policy.Warsh stated that the Federal Reserve is firmly committed to maintaining price stability and bringing inflation back to the 2% target, while emphasizing that the Fed possesses the policy tools necessary to achieve this goal. He said, “The more we focus on our mandate, the further we can distance ourselves from politics.”” Warsh also said the Fed would reexamine its inflation framework to gain a deeper understanding of the factors driving inflation and the measures that can be taken to address it.
Regarding the Fed’s newly established working groups, Warsh noted that they are currently in the exploratory phase. He pointed out that discussions will first take place among the 19 policymakers, that the entire process will remain open and transparent, and that research findings and policy ideas will be shared with the public on a regular basis.
Regarding balance sheet policy, Warsh emphasized that the balance sheet is part of monetary policy, not merely a matter of financial market operations. Any adjustments to balance sheet policy will be fully communicated and explained in advance, giving the market sufficient time to prepare.When asked how he would respond if Donald Trump attempted to interfere with the Fed’s policies, Warsh replied that he would continue to fulfill his duties and adhere to the independent formulation of monetary policy. He noted that the Fed has already demonstrated its commitment to policy independence and institutional reform. (Jin Shi)