Faulkender Urges Warsh to Stick with 2% Inflation Target

Michael Faulkender, a former Deputy Secretary of the United States Treasury, has weighed in on monetary policy with a suggestion for Federal Reserve Governor Kevin Warsh. Faulkender thinks Warsh should reaffirm his commitment to bringing inflation back down to 2.0%, rather than raising interest rates.

Faulkender argues that energy-driven price pressures do not justify an increase in interest rates, and instead points out the $40 trillion debt threshold as a market concern. He describes this threshold as a focus on rising debt-service costs and believes the Treasury's bond-buyback program to be useful, but only a 'rounding error'.

Faulkender also comments on Axios reporting that Marco Rubio told foreign counterparts the US is shifting from new strikes toward sanctions on Iran, including potential pressure on China over its purchases of Iranian oil. Faulkender does not express an opinion on this matter beyond sharing the information.