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New Federal Reserve Chair Kevin Warsh's pointed rhetoric on inflation, paired with a drop in oil prices, has pulled long-term expectations for price rises lower — and that combination has given investors cause for reassurance about the policy path ahead.
The dual development marks an early signal that Warsh intends to use the Fed's credibility as an active tool, not a passive inheritance.
Warsh Sets a Hawkish Tone at the Fed Warsh, who took over as Federal Reserve chair, made clear in recent comments that the central bank has not declared victory on inflation.
His language carried the kind of pointed edge markets associate with policymakers willing to accept near-term economic discomfort to anchor long-run price stability.
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