The expectations that the Federal Reserve of the United States (Fed) will raise interest rates again at the end of October, after the increase of 25 basis points approved in September that brought the money price to the target range of 3.75% and 4%, were moderated this Friday, after the U.S. central banker Kevin Warsh stated that in the last month "everything has adjusted to our expectations."
During a dialogue with the Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, the president of the Fed reiterated the commitment of the U.S. central bank to price stability, emphasizing that about a month ago certain stimulus measures were withdrawn.
However, Warsh has insisted that "generally speaking, during the month that has passed since then, everything has adjusted to our expectations," despite the fact that this week it was reported that the Consumer Price Index (CPI) of the United States rose to 3.7% year-on-year in September.
In any case, the so-called 'Guardian of the dollar' has emphasized that the institution will still hold a couple more meetings in 2026, which will be key moments to assess the scenario. "I do not prejudge the meetings. I do not believe in predicting now what I will do in the meetings we have for the rest of the year," he added.
According to the CME market forecasting tool, the probability that the Fed will keep rates at its October meeting was at 85%, compared to the 72% recorded yesterday, before Warsh's statements, and around 50% a month ago. Meanwhile, the option of an additional quarter-point increase has decreased from 48% a month ago to about 15% currently.
On the other hand, the president of the Fed has highlighted not only the resilience shown by the U.S. economy but also a rebound in investment that goes beyond the boost linked to AI, which, in his opinion, reinforces and gives greater solidity to growth.
In this regard, Warsh has indicated that in almost all areas of the global economy there is a strength that would have been difficult to anticipate a few months ago, given the geopolitical tensions and the numerous conflict hotspots around the world, as well as the shared challenge of inflation, which is not limited to the United States.
"A simultaneous tightening of monetary policy occurred in most places around the world, and that means there are no beneficiaries without contribution," he pointed out, recalling that each central bank makes the decisions it deems appropriate based on its mandate and the tools at its disposal.