Warsh Flags Concern Over High Inflation, Hints at Possible Interest Rate Hikes
US Federal Reserve Chair Kevin Warsh expressed concern over high inflation in the country's economy during his speech at the annual central banking meeting in Jackson Hole, Wyoming. He stated that the numbers for price stability are 'more concerning' and hinted that the central bank may need to act to curb it.
The Fed has missed its long-term 2 percent inflation target for more than five years, with the latest reading of its preferred gauge coming in at 3.7 percent this week. Warsh emphasized the importance of confidence in underlying inflation moving towards the objective 'clearly and at sufficient speed,' indicating that there is still work to be done.
Despite this, Warsh was impressed by the overall performance of the economy, citing business capital expenditure, corporate earnings, and consumer spending as positives. He also spoke about the effects of artificial intelligence (AI) on the US economy, calling it a 'hinge point in history' and highlighting its impact on productivity and jobs.