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Steve Forbes has put the country on notice, urging new Federal Reserve Chair Kevin Warsh to speak plainly about what actually drives inflation when he takes the podium at the Jackson Hole symposium. Forbes insists Warsh should reject the tired conventional wisdom that jacking up interest rates is the answer, and instead explain the deeper monetary and policy mistakes that produced today’s price pressures.
Kevin Warsh is now the nation’s central banker after a contentious confirmation process, and he has already taken the oath as chair of the Board of Governors — a change in stewardship that matter-of-factly reshapes economic expectations. Americans deserve clarity from their Fed, not technocratic hand-wringing or vague models that have failed ordinary families.
Conservatives who have been warning about the erosion of the dollar and reckless fiscal policy have every reason to press Warsh to explain realities, not comfort the same economists who missed the inflation surge. Forbes argues, sensibly, that conflating supply shocks and regulatory burdens with “monetary inflation” has led to the wrong prescriptions; raising rates without addressing money growth, fiscal profligacy, and supply constraints is a recipe for needless pain.
The Fed’s past reliance on abstract models and the Phillips Curve mentality has had real consequences: choking off growth while leaving prices elevated in sectors hit by policy-driven distortions. Veterans in conservative economic circles have laid out how a commitment to sound money and restrained government, rather than constant rate fiddling, would be a better path to durable price stability. Warsh must show he understands that trade-offs and alternative remedies exist beyond the Fed’s hammer.
Markets are already watching Warsh closely, and there is pressure on him to clarify whether the Fed will continue reflexive rate hikes or shift toward a posture that recognizes market-driven price signals. Officials and traders alike expect Jackson Hole to be a defining moment, because uncertainty from conflicting signals between Treasury and the Fed only raises borrowing costs for American families and businesses. The ball, as observers have noted, is now very much in Warsh’s court.
Warsh has publicly committed to restoring price stability, and conservatives should hold him to that promise while insisting on policies that promote growth and entrepreneurship instead of austerity-by-rate-hike. A pragmatic Fed that focuses on money-supply realities and the distortions caused by overregulation will do more to help workers than another round of punitive rate increases.
Patriotic Americans — the small-business owners, blue-collar workers, and savers who feel the sting of rising costs — should demand honesty and a clear plan from Jackson Hole to Main Street. If Warsh speaks the truth and rejects the failed playbook, he can begin to restore credibility to the Fed; if he doesn’t, conservatives will rightly hold him accountable for any additional economic harm inflicted by needless rate mania.
