BANGKOK (AP) — Federal Reserve Chairman Kevin Warsh said Friday he won't prejudge what the U.S. central bank will do about interest rates at its upcoming meetings in October and December.
The Fed increased its key interest rate by a quarter-point to about 3.9% in September, its first increase in three years, and stubbornly elevated U.S. inflation will likely lead it to hike that rate again in coming months to slow spending and help cool price pressures.
WATCH: Warsh says 'inflation is too high' after Fed raises interest rate 1st time in 3 years
But Warsh offered no fresh signals during a "fireside chat" with International Monetary Fund Managing Director Kristalina Georgieva at a meeting of financial leaders in Bangkok.
"At the Federal Reserve, we made very clear that we would deliver price stability, and we removed a dose of accommodation about a month ago," Warsh said. "I don't prejudge meetings. I don't believe in saying now what I might do at the meetings that we have in the balance of this year."
The Fed's September rate hike defied U.S. President Donald Trump's repeated calls for the Fed to cut rates. The president criticized the Fed's rate-setting committee, though he still expressed support for Warsh, whom he appointed earlier this year.
The global surge in prices is a key concern of central bankers and financial leaders meeting in Bangkok.
According to minutes released from the most recent meeting, most Fed officials expect that another interest rate increase will likely be needed this year. That would raise borrowing costs for mortgages, car loans, and credit cards over time.
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Warsh said the surge in investment driven by the craze for artificial intelligence is one of the factors behind higher inflation and the Fed's task force on issues related to AI will meet Nov. 16.
"I'd say the advent of this new technology is probably the most consequential change to the U.S. and the global economy in my lifetime to this point," he said.
Unlike military conflict and other shocks that are driving prices higher, Warsh said he believes AI will bring "huge benefit" to the world economy in time.
For Fed economists who struggle to foresee the future using data that lags behind today's realities, AI could prove a vital tool, he said.
"We torture data with old fashioned models to try to find out what's underlying inflation trends. Not so long from now, it won't be torture. We will have access at the fingertips of central banks to all the information in the world, and we'll be able to use new analytical tools to distill that data," he said.
AP Economics Writer Christopher Rugaber in Washington and AP journalist Haruka Nuga in Bangkok contributed to this story.
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