Speaking with IMF chief Kristalina Georgieva at the IMF-World Bank Annual Meetings in Bangkok on October 16, 2026, Warsh kept guidance scarce. "I don't prejudge meetings. I don't believe in saying now what I might do at the meetings that we have in the balance of this year," he said, emphasizing that markets should read the data rather than get advance hints.
He added that this approach may disappoint those seeking a steer before the late October meeting: "It's a new chapter at the Fed [and] we're not in that business anymore."
Warsh cast the worldwide move to higher rates as a shared effort against inflation, with each central bank acting under its own mandate but producing "a synchronous tightening in monetary policy in most places around the world," meaning "there's no free riders."
At the same time, the Iran war has driven up energy prices, and an AI-fueled investment surge is lifting both inflation and interest costs. All of this comes while global public debt is tracking toward more than 100% of world GDP, a level last exceeded just after World War II. The U.S. government says faster growth is the best route to handle its debt and has waved off the IMF's warning against relying solely on growth as something to take "with a grain of salt."
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Warsh said he is optimistic that well-used AI will make economies more productive and wealthier, while cautioning the transition could be "very bumpy" and that its near-term effect on employment remains uncertain. "I want you to hear from me optimism, but optimism leavened by the seriousness of purpose," he said, adding that a decade from now people will look back and "say this was hugely consequential."
Following his remarks, S&P 500 and Nasdaq futures ticked up, as Asian equity gauges and U.S. Treasury yields mostly held flat. In a note, Goldman Sachs, with Jan Hatzius at the helm of its economics team, said that taken with other Fed commentary, Warsh's tone points to an October pause by the FOMC; they continue to anticipate one last rate increase in December.
Last month, the Fed lifted interest rates, setting the range at 3.75% to 4%, the first increase since 2023. According to CME FedWatch, traders assign a 72.3% probability that the Fed keeps rates unchanged at the Oct. 27-28 meeting, and most look for a 25 basis point hike in December.
If October is a pause and December delivers one last move, markets will trade on how long policy stays restrictive and how global tightening spills into earnings and credit costs. Rate sensitive corners like growth stocks and longer duration bonds will swing most as those odds evolve. The bottom line: watch the pause probability now and the December path next.
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