Walsh insists on prudent market guidance if inflation is strong or if interest increases in September are considered

On 6 August, the British Financial Times reported that Federal Reserve Chairman Walsh had insisted on his consistent style of communication even after he had decided not to disclose too many details of the interest rate strategy, which had led to a substantial sale of the national debt. Those close to Walsh said he acknowledged that he had made a number of mistakes during the first 10 weeks of the world’s most important central bank, including the failure to strengthen its key message on price stability, and the confusion about whether its long-term plan to reform the Fed would influence recent policy decisions. They maintained, however, that those errors were not sufficient to justify the overthrow of Walsh ' s reform plan for the Fed. Informed sources also revealed that, if the inflation data published in the coming weeks were strong and the market's expectations of rising borrowing costs were raised, Walsh was prepared to raise interest rates at the September meeting. The source added that, although the Fed Chairman had proposed the possibility of reducing the central bank balance sheet of $6.7 trillion in order to tighten monetary policy, interest rates were still the main instrument — if needed, to be used at the forthcoming meeting。