Goldman Sachs president John Waldron reportedly criticized Fed credibility and slammed its performance as an independent policymaker

• Goldman Sachs president John Waldron criticized the Fed's credibility to rein in inflation, Bloomberg reported.
• Waldron questioned its ability to act as an "independent, monetary policy engine."
• "They have a chance here to do that, but I am a little worried about whether they'll stand up and do it," he said.

Goldman Sachs president John Waldron criticized the Federal Reserve's credibility to rein in surging inflation as the central bank on Wednesday offered its clearest signal yet of raising interest rates by March, Bloomberg reported.

Waldron, Goldman's number two executive, also slammed the central bank's performance as a policymaker and questioned its ability to act as an "independent, monetary policy engine that is doing what it thinks is right and not what's expedient," according to Bloomberg.

"They have a chance here to do that, but I am a little worried about whether they'll stand up and do it," the executive said during a virtual meeting of the New Jersey State Investment Council where he was a speaker, Bloomberg reported. Waldron was answering a question about whether the Fed will continue hiking rates and reducing its nearly $9 trillion balance sheet even if markets react poorly.

"I'm not entirely convinced the Fed has the will to do it," he said, referring to a balance sheet that more than doubled in two years. "I'm not sure they believe the Fed has the will either."

On Wednesday, the Fed indicated hawkish plans for rate hikes this year to tame inflation that is running at the fasted pace in 40 years. The central bank's policy statement opened the door for the Fed to start raising the benchmark rate as early as March. In the press conference that followed, Chair Jerome Powell acknowledged that inflation may stay high for longer than expected and admitted that a rate hike at every meeting of the Federal Open Market Committee this year is not off the table.

Waldron also brought into the discussion a former Fed chief who undertook a series of adjustments known as the "Volcker Shock," in which the Fed tightened the money supply while allowing the market to determine interest rates.

"We might need to bring back Paul Volcker," Waldron said. "And have somebody that would be willing to kind of stay the course without regard to exactly what's going on in the markets."