This is the highest-impact appearance of the day. Short-dated Treasuries and the dollar are most exposed to any signal that October is live, after Wednesday’s inflation data lifted two-year yields sharply. Oil is the central variable: fuel costs tied to the Iran war are the main source of the latest inflation jump, so a sustained move in crude feeds directly into Fed hike expectations. A hawkish Warsh would likely add pressure on equities and gold, which slid after the CPI release as yields rose. A guarded performance, sticking to his dislike of forward guidance, would leave the hike debate resting on data.

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Warsh is the big one today! But not the only one:

• BOE, Bailey, Bangkok. What could possibly go wrong? Preview and 3 questions for the Governor
• Preview: Nagel and Klingbeil in Bangkok: three themes as the ECB weighs a December hike
• Macklem in Bangkok: oil, tariffs and job losses test the Bank of Canada’s hike case

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Warsh has spent two months arguing inflation will not fix itself, and a hot September CPI hands him the evidence just as markets debate whether the Fed’s second hike comes in October or December.

Summary:

• Warsh appears in a moderated conversation at the IMF meetings in Bangkok at 03:30 GMT (23:30 ET Thursday)
• The Fed raised rates by a quarter point to 3.75%-4.00% in September, its first hike since 2023, on a unanimous vote
• September CPI beat forecasts, with headline and core inflation both rising on higher fuel costs
• Hiring has slowed sharply, but unemployment remains low and within a narrow range
• Most Fed officials projected at least one more hike this year; the next meeting is 27-28 October
• Warsh has said inflation is the bigger concern and opposes giving forward guidance

Federal Reserve Chair Kevin Warsh appears in a moderated conversation at the IMF and World Bank annual meetings in Bangkok on Friday, days after US inflation data strengthened the case for further tightening. The session is scheduled for 03:30 GMT (23:30 US Eastern on Thursday), less than two weeks before the Federal Open Market Committee meets on 27 and 28 October.

The Fed is on a hiking path. In September it raised the federal funds target range by a quarter point to 3.75% to 4.00%, its first increase since 2023, according to the Fed’s published statement. The vote was unanimous. The move reversed the last of three quarter-point cuts delivered in late 2025 and signalled a clear shift in priorities towards inflation.

That shift was driven by prices. Inflation has run above the Fed’s 2% goal for years, and higher fuel costs linked to the Iran war have pushed it further from target. September consumer price data released on Wednesday showed headline inflation rising again and beating forecasts, with core inflation also edging higher. The Fed said in September that inflation remains elevated and that its decision would support a timelier return to target.

The labour market, the other half of the Fed’s dual mandate, is less of a constraint for now. Hiring has slowed markedly in recent months and earlier figures have been revised lower. However, the unemployment rate has stayed within a narrow range and remains low by historical standards.

Warsh has made his priorities clear. In his Jackson Hole speech in August he said inflation was too high and would not return to target on its own, arguing that underlying price pressures had not meaningfully improved. He judged inflation a bigger concern than the jobs market. He also said current rates were not restricting activity given strong investment and consumer spending, and described short-term rates as the Fed’s main tool against inflation. He has also said he opposes giving forward guidance on future meetings.

Other officials have leaned the same way. Cleveland Fed President Beth Hammack is a voter this year and dissented in favour of a hike in July. She said this week she believes rates need to rise further to restrain demand, while keeping an open mind on the timing.

Markets had leaned towards a hold in October after a weak September jobs report. Wednesday’s inflation data pushed Treasury yields higher as traders added to bets on further tightening. In September, most Fed officials projected at least one more increase by year-end.

Several things are worth watching:

• October: whether Warsh signals that an October move is live, or keeps to his line against previewing decisions.
• Energy: how he characterises the fuel-driven rise in inflation, and whether he sees signs of it spreading into wider prices and expectations.
• Jobs: whether the slowdown in hiring features in his assessment at all.
• AI investment: given the IMF setting, whether he returns to his argument that strong AI-related investment is one reason current rates are not holding back activity.

This article was written by Eamonn Sheridan at investinglive.com.

Source: Investing Live - Central Bank