Federal Reserve Chair Kevin Warsh holds a press conference following the FOMC meeting Wednesday (local time). [AFP]
Federal Reserve Chair Kevin Warsh holds a press conference following the FOMC meeting Wednesday (local time). [AFP]

Federal Reserve Chair Kevin Warsh doubled down on the central bank's 2 percent inflation target Wednesday, making clear the Fed will not soften its price goal even as inflation has shown signs of easing.

Speaking at a press conference immediately after the FOMC meeting Wednesday, Warsh said five years of elevated inflation had led some households, businesses and market analysts to mistakenly believe the Fed had quietly raised its implicit inflation target above 2 percent. "There is no relaxed inflation target," he said.

"At least not under this committee," he added. "There is only one target, and it is 2% inflation."

Warsh said no one on the FOMC harbors any illusions about the challenge ahead. "We have begun a new chapter, and we know well that more than five years of above-target inflation cannot be resolved in nine weeks or by one month of modest price declines," he said.

The Fed held its benchmark interest rate steady at 3.50–3.75% at the meeting, marking five consecutive holds this year.


mokiya@heraldcorp.com