US Federal Reserve Chair Kevin Warsh stated on Friday that the global economy has demonstrated unexpected resilience in the face of significant economic shocks, even as central banks contend with rising <a Almost everywhere in the global economy (is) showing resilience I'm not sure I would have predicted five or six months ago," he told an event hosted by IMF chief Kristalina Georgieva at the IMF-World Bank Annual Meetings in Bangkok.
Global energy prices have climbed sharply since US President Donald Trump initiated the war on Iran in February, triggering retaliatory measures by Tehran against Washington’s Gulf allies and pushing the Middle East into a state of crisis.
The rise in oil and gas prices, coupled with a surge in AI-related inflation across many nations, including the United States, placing pressure on central banks to increase interest rates.
While numerous other wealthy economies have successfully guided post-pandemic inflation back toward their targets, the Fed has struggled to reach its long-term two-percent objective for more than five years.
Since assuming the role of Fed chair in May, Warsh has pledged that the central bank will fulfill its commitment to price stability, and in September, it implemented its first interest rate hike in three years.
The Fed is scheduled to meet again this month to determine rate policy, and market analysts anticipate a pause before a second 25-basis-point increase occurs in December.
Warsh has committed to providing fewer details regarding Fed policy stances, and on Friday, he again declined to share his perspective on what might occur during the October meeting.
“We came to a judgement” about the economic outlook at the September meeting, he said. “I want to say broadly over the month or so that’s transpired since then, the world has broadly conformed to our expectations.”
The annual meetings gather finance ministers, central bankers, and policymakers from across the globe, and Warsh noted that he had heard from his counterparts regarding the “common challenges” that advanced economies are currently facing.
“I heard, I would say, resolve from my colleagues around the world to deliver price stability,” he said.
Most developed nations have begun raising interest rates in response to escalating inflation, a group that includes the European Central Bank (ECB).
“If I look back over the last few months, while we each did the right thing by our own judgement, by our own remit, it was a synchronous tightening in monetary policy in most places around the world,” said Warsh.
“And that means there’s no free riders. We’re seeing common things, and we’re taking action, and I view that as a positive development.”
