Fed Chairman Warsh: Economic activity is expanding at a strong pace, inflation remains elevated

The the nasdaq is back in negative territory. S&p is up 13 points. And the ten year has moved up a little bit. Jeff to 5.028. — There's Kevin Warsh good day.

This morning the fomc decided to maintain the target rate for the federal funds rate at three and three quarters to 4% in support of the federal reserve's dual mandate. Economic activity is expanding at a strong pace, while uncertainty remains owing in part to geopolitical developments. Domestic spending has been resilient.

Productivity growth is strong and capital investment robust. Job gains have kept pace with the workforce, and the unemployment rate has changed little. But inflation remains elevated.

The committee believes that the accumulation of more information will help to determine the policy stance appropriate to ensure a timely return of inflation to the 2% goal, the committee will deliver price stability. At each policy meeting, my colleagues and I assess the economy by looking out the window. It's what we call interrogating reality to gauge what's really going on.

It is not a task that has grown easier. So what exactly do we observe? Economic growth has strengthened the gdp increase in the first half of this year was revised up from an earlier estimate of 1.8%, up to 2.4%, and the third quarter appears to have brought an even more rapid advance, led by healthy consumer spending, likely running above 3% growth and business investment investment likely rising at about a double digit pace.

Capital expenditures are at a historically high share of gdp. High tech investment is leading the acceleration, but there's also been a broadening in other categories, and these trends bear watching. What about the jobless rate?

The jobless rate is lower than a year ago, and payroll growth is noticeably above last year's pace.