Kevin Warsh, Chairman of the U.S. Federal Reserve, said on Monday at the G20 meeting of finance ministers and central bank governors that global investment is rising significantly, which will help drive economic growth, contrasting with the past when the world faced excessive global savings, causing capital to be concentrated in low-yielding assets. Warsh said the current situation has reversed from previous discussions about a global savings glut, and the idea of secular stagnation can no longer explain the current context. He also said he is considering whether the U.S. economy and other G20 countries could grow faster than the Congressional Budget Office's projection of about 1.8% per year. This is the first time Warsh has presented his vision on the G20 stage since taking office as Fed Chairman in May, and it comes just days after his speech in Jackson Hole, where he indicated that core inflation must move clearly toward the target, fueling expectations that the Fed might raise interest rates in September.
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