Trump will be furious as his man at the Fed tries to set his record straight

August 31, 2026 — 11:57am

You have reached your maximum number of saved items.

Remove items from your saved list to add more.

Kevin Warsh said what he had to say on Friday to protect his credibility and that of the US Federal Reserve Board. The bigger question is whether he will do what he has to do when the Fed meets in a couple of weeks.

Warsh’s speech at the annual Jackson Hole conference of economists and central bankers in Wyoming needed to restore some confidence in the Fed after his less than reassuring performance after the Fed’s July meeting, which left markets unsure of his commitment to combatting America’s elevated inflation rate.

At that meeting, in his first press conference as Fed chair, not only did he not provide the forward guidance that he has an aversion to, but he left the impression that the Fed was comfortable with the current monetary settings – where US inflation is running at 3.7 per cent, and would move only if new data forced it to.

On Friday, he sought to dispel that impression and other preconceptions drawn from his prolific commentaries on monetary policy, burnishing his credentials as an inflation hawk, albeit that he didn’t actually commit himself or the Fed to any course of action.

“There should be no misunderstanding,” he said.

Meddler-in-chief: Trump is up to his old tricks again

Stephen BartholomeuszSenior business columnist

Senior business columnist

“The Fed’s price-stability objective of 2 per cent, as measured by the personal consumption expenditures (PCE) price index, is a firm, fixed target.

“Price stability is not self-executing, nor is inflation necessarily mean-reverting. It’s the Fed’s job to deliver stable prices.”

The Fed has a dual mandate: maximising employment while maintaining stable prices. Warsh was positive about employment, and said the labour markets were consistent will full employment, but he was concerned about price stability.

“The Fed’s preferred measure of inflation, the 12-month change in the PCE price index, stands at 3.7 per cent,........

© The Age