Chair Warsh Says Fed Will Deliver Price Stability

Summary

Federal Reserve Chair Kevin Warsh holds his first press conference, announcing the FOMC kept rates unchanged at 3.50-3.75% and reaffirmed the goal of price stability. He highlights the removal of forward guidance from the policy statement, describes rigorous debate among members, and presents updated economic projections showing GDP growth around 2.2-2.3%, elevated near-term inflation, and a gradual decline in the projected fed funds rate.

• Fed holds target range for fed funds rate at 3.50-3.75%.
• Committee unanimously committed to delivering price stability.
• Policy statement shortened, forward guidance removed as unsuited to current conjuncture.
• Median projections: GDP 2.2% in 2024, 2.3% in 2025; PCE inflation 3.6% then 2.3%.
• Unemployment rate seen around 4.3%.
• Median appropriate fed funds rate: 3.8% end-2024, 3.6% end-2025.
• Warsh refrained from submitting his own economic projections.