Warsh Hints at Rate Hike as Inflation Stays Stubbornly High

Federal Reserve Chair Kevin Warsh indicated that the central bank may increase interest rates to combat inflation, which has remained above its target rate of 2% for five years.

In a speech at the Fed's annual economic symposium in Wyoming, Warsh emphasized the importance of keeping underlying inflation under control and acknowledged that the central bank bears responsibility for the sustained elevated inflation over the past five months.

Warsh noted that while some measures of inflation, such as the personal consumption expenditures (PCE) and consumer price index (CPI), were better than expected, they do not signal 'underlying trends have meaningfully improved.'

The remarks come after President Trump suggested frustration with the Fed's lack of interest rate cuts and called current rates 'artificially' high. The president also accused Fed officials of political bias.