What did Kevin Warsh say about the strength of the US economy and global economic resilience?

Kevin Warsh said the U.S. economy had strong and durable momentum because investment was broadening beyond AI. He also said global economies had shown more resilience than he expected despite geopolitical shocks and tighter monetary policy.

Why did Kevin Warsh avoid saying whether the Federal Reserve will raise interest rates again?

Warsh said he does not prejudge Federal Open Market Committee meetings and would not announce in advance what he might do at meetings remaining this year. His comments followed a September rate hike and came as Fed officials sought more data on inflation.

What were financial markets expecting for the Federal Reserve’s next interest-rate decision?

Financial markets were expecting the Fed to leave rates unchanged at its next meeting and wait until December for another increase. That expectation persisted after reports showed two inflation measures rising faster than anticipated and moving away from the Fed’s 2 percent goal.

Fed's Warsh sees US economic tailwinds, mum on rate-path view

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Summary

Federal Reserve Chairman Kevin Warsh voiced optimism about U.S. economic strength in Bangkok on Friday. He said broad investment, including but not limited to AI, was creating tailwinds for the U.S. economy, while global economies showed resilience despite geopolitical shocks and synchronized monetary tightening. Warsh declined to indicate whether the Fed would raise interest rates again or when.

Key Facts

Warsh said global central banks faced a common inflation challenge after carrying out synchronized monetary tightening in most regions.
The Fed removed a dose of monetary accommodation through a September interest-rate hike, according to Warsh.
Nearly all of Warsh’s Fed colleagues recently said additional tightening was probably needed, while seeking more data on inflation.
Financial markets were betting that the Fed would wait until December for another rate increase, even after two inflation measures exceeded expectations.
Warsh said U.S. investment was broadening beyond AI and that the resulting momentum was not equally evident worldwide.

By Reuters

Published Oct 16, 2026 3:04 pm KST

Federal Reserve Chairman Kevin Warsh speaks during a 'fireside chat' with IMF Managing Director Kristaline Georgieva at the Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group (WBG) at the Queen Sirikit National Convention Center (QSNCC) in Bangkok, Oct. 16. AFP-Yonhap — Federal Reserve Chairman Kevin Warsh speaks during a "fireside chat" with IMF Managing Director Kristaline Georgieva at the Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group (WBG) at the Queen Sirikit National Convention Center (QSNCC) in Bangkok, Oct. 16. AFP-Yonhap

BANGKOK — Federal Reserve Chairman Kevin Warsh voiced optimism on Friday about U.S. economic strength and surprise about how well global economies have been "hanging in there" amid recent geopolitical shocks, despite tighter monetary policy to fight inflation.

"I came out of meetings here yesterday and today and it's hard to be in a discussion with central bankers and not compare notes and hear the same thing about the surge in prices," Warsh said.

With inflation a "common challenge," he said at the 2026 IMF-World Bank annual meetings in Bangkok, global central banks undertook "a synchronous tightening in monetary policy in most places around the world, and that means there's no free riders."

In the U.S., he said, "We made very clear that we would deliver price stability, and we removed a dose of accommodation about a month ago," in a reference to the Fed's September interest-rate hike.

No preview of need for more rate hikes

But in keeping with his style since taking the reins as Fed chief in May, he gave no preview about whether he feels more interest-rate hikes will be needed, or when.

"I don't prejudge meetings," Warsh added. "I don't believe in saying now what I might do at the meetings that we have in the balance of this year."

Warsh's colleagues at the Fed have not been reticent on their rate-path views.

In recent weeks nearly all said they feel more tightening is probably needed, but most wanted to see more economic data in order to assess the inflation trend, a signal that they were unlikely to deliver a second rate hike this month.

Financial markets have taken those remarks on board and are betting the Fed will wait until December to raise rates.

That remained true even after reports this week showed two different measures of inflation running higher than expected and heading in the wrong direction from the Fed's 2 percent goal.

A trader works, as a screen broadcasts a press conference by U.S. Federal Reserve Chair Kevin Warsh following the Fed rate announcement, on the floor of the New York Stock Exchange (NYSE) in New York City, July 29. Reuters-Yonhap

Broader economic themes

Warsh's decision to skirt the near-term policy decision altogether and stick to broader economic themes leaves intact the expectation that the Fed will not hike this month.

He touched on aspects such as the impact of AI, the need to maintain financial stability, and views of U.S. growth and global economic resilience.

"I feel in the United States that the real economy, because of a resiliency that you mentioned, but because of a surge of investment — which isn't just AI: that surge of investment is broadening," Warsh said in a conversation with Kristalina Georgieva, managing director of the International Monetary Fund.

"It means we've got plenty of tailwinds that are giving some strength and durability to this economy ... That sort of momentum is certainly not found everywhere in the world."

Warsh said the global economy was "showing resilience that I'm not sure I would have predicted five or six months ago, given what's happening in geopolitics and hotspots around the world.

"We're seeing common things and we're taking action and I view that as a positive development," he added.

"I believe optimistically, you might think naively, at least in the United States, we're going to come out of this stronger with a more durable economy, more capable of leading the world on economic growth."

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