Fed's Warsh Sounds Alarm on Inflation, Cites Persisting High Rates

US Federal Reserve Chairman Kevin Warsh expressed concerns about inflation at the Jackson Hole Economic Symposium on Friday. Despite a resilient economy and growing investments in artificial intelligence, Warsh stated that inflation remains 'too high'. He noted that the Fed's preferred measure of inflation stood at 3.7% over the past 12 months, with a six-month change of 4.1%, far above the central bank's target of 2%. Warsh emphasized that policymakers must be confident that underlying inflation is moving toward their objective at a sufficient speed.

While this summer's personal consumption expenditures and consumer prices index readings were better than expected, Warsh warned that they do not indicate meaningful improvements in underlying trends. He stressed that if the current trend continues, the central bank still has work to do to achieve price stability.