BANGKOK, Thailand — US Federal Reserve boss Kevin Warsh said Friday the global economy had shown unexpected resilience against strong economic shocks, as central banks battle surging inflation, while rich countries tackle spiking bond yields.
“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.
World energy prices have skyrocketed since US President Donald Trump launched the war on Iran in February, sparking retaliatory action by Tehran against Washington’s Gulf allies and plunging the Middle East into crisis.
The increase in oil and gas costs, along with a surge in AI investments, has spurred inflation in many economies, including the United States, putting pressure on central banks to raise interest rates.
While many other rich economies were able to bring post-pandemic inflation back to their targets, the Fed has failed to meet its long-term two-percent goal for more than five years.
Since taking over as Fed chair in May, Warsh has promised the central bank will deliver on its price stability commitment, and in September it raised rates for the first time in three years.
The Fed meets again this month to set rates, and markets expect it to hold before a second 25-basis-point hike in December.
Warsh has vowed to cut down on providing insights into Fed policy positions, and on Friday again refrained from sharing his view of what may transpire at the October gathering.
“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.”
