Potential Candidates for Fed Chair: Blaming External Factors for Inflation Concerns Actually Undermines the Fed's Credibility
According to a report by Jinse Finance, Kevin Warsh, considered a potential candidate for the Federal Reserve Chair next year, stated that the Fed's concern that "tariff increases may hinder inflation control" is damaging to its credibility. Warsh said, "When the Fed asserts that inflation will be affected by external changes in price levels, they are, to some extent, admitting something detrimental to their own interests. They are acknowledging that their credibility has already been damaged." Warsh also pointed out that the large and frequently expanding Federal Reserve balance sheet may contradict the main policy lever of setting short-term borrowing rates, but "if the printing press can quiet down, we can lower policy rates."
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