© Bloomberg. Kevin Warsh, former governor of the U.S. Federal Reserve, speaks during the American Economic Association (AEA) annual conference in Chicago, Illinois, U.S., on Friday, Jan. 6, 2017. Warsh said that more reform is needed at U.S. central bank than ever before.
(Bloomberg) — The Federal Reserve is unlikely to change its stance on interest rates or asset purchases before its meeting in Jackson Hole, Wyoming, in August, said former Federal Reserve Governor Kevin Warsh.
Getting the Fed to change their policies before Jackson Hole is a long putt from here, Warsh said, according to people familiar with his comments. He was participating in the Robin Hood Investors Conference Wednesday.
Warsh added that a rise in consumer prices won’t be enough to get the Fed to raise rates or taper purchases, but that a jump in employment numbers would more likely be the potential trigger.
When the Federal Reserve wraps up its meeting today, economists expect the so-called dot plot to point to an interest-rate increase in 2023, while the central bank is unlikely to signal a scaling back of bond purchases until later this year.
Warsh, who was interviewed by billionaire Stan Druckenmiller, said the Fed’s current view — that the recent spike in prices is transitory — is flawed because we won’t know if it’s correct until it’s too late.
Warsh’s perspective aligns with some other former Fed officials and prominent investors. Druckenmiller said in an interview on CNBC last week that the Federal Reserve has lulled investors into a false sense of security and distorted asset prices.
Read More: U.S. Inflation Isn’t Scary Yet, But It Could Be: Bill Dudley
Paul Tudor Jones said in an interview on the network earlier this week that from an economic standpoint, things are “bat s crazy.” The Fed is focused on unemployment, juicing an already hot economy, even as inflation and financial stability are growing concerns, he said.
Warsh is currently a visiting fellow in economics at Stanford University’s Hoover Institution. He served on the Fed’s board of governors from 2006 to 2011.
Robin Hood, which is hosting the investment conference, has been fighting poverty in New York City since 1988, and has awarded grants of $3 billion during that time.
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