HONG KONG, May 19 (Reuters) – Incoming Federal Reserve chair Kevin Warsh faces both a tough environment and a “difficult boss,” Standard Chartered CEO Bill Winters said on Tuesday, pointing to political pressure on Warsh to cut rates even as inflation remains high.
“Inflation is stubbornly high and unlikely to come down, but he’s got the political environment (in which) he will be criticised if he doesn’t cut rates,” Winters told reporters in Hong Kong.
“He has got a difficult boss but you know he (Warsh) is a serious guy.”
Warsh will be sworn in as U.S. Federal Reserve chief on Friday by President Donald Trump. Trump chose Warsh to head the U.S. central bank following the end of Jerome Powell’s term.
U.S. CPI increased 3.8% in the year to April, the biggest annual increase in three years, reflecting rising energy prices following the U.S.-Israeli war with Iran.
Some Fed policymakers are already concerned about high inflation and want to use the Fed’s policy statement to signal that rate hikes, not rate cuts, may be coming.
Trump has repeatedly called on the Fed to cut rates dramatically. Market pricing currently shows roughly a 60% chance the Fed raises rates by year-end.
(Reporting by Selena Li in Hong Kong, Writing by Alun John; Editing by Dhara Ranasinghe)
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