Content and data provided by various third parties and Fidelity - Terms of Use
Print.Print
Small font size A Larger text size A Largest text size A

Fed's Warsh has a difficult boss and tough job ahead, says StanChart CEO Winters

BY Reuters | ECONOMIC | 04:07 AM EDT

HONG KONG, May 19 (Reuters) - Incoming Federal Reserve chair Kevin Warsh faces both a tough environment and a "difficult boss," Standard Chartered (SCBFF) 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)

More Fixed Income News

All Fixed Income News

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

© 1998 – 2014 FMR LLC.

All rights reserved.
fir_news_article