Warsh Flags High Inflation Concerns, Hints at Rate Hikes

US Federal Reserve Chair Kevin Warsh has broken his silence on the economy, expressing concern over high inflation and hinting at potential interest rate hikes. In a speech delivered at the Jackson Hole central banking meeting in Wyoming, Warsh stated that 'numbers are more concerning' when it comes to price stability.

'I am impressed by the overall performance of the economy,' he said, citing strong business capital expenditures, corporate earnings, and consumer spending metrics. However, he emphasized that the central bank's focus should be on bringing underlying inflation in line with its 2% target.

Warsh stopped short of committing to a rate hike, saying only that he would be 'hard pressed' to describe current financial conditions as 'restrictive.' Despite this ambiguity, his comments sparked a brief dip in long-term US Treasury yields and a strengthening dollar.