Warsh Puts Fed Rate Hike Back on Table as Inflation Lingers

Fed Chair Kevin Warsh has raised the stakes for the central bank's next meeting in mid-September by suggesting that interest rates may need to increase if inflation doesn't improve.

Warsh opened the door to potential rate hikes during a speech at the Fed's annual Jackson Hole economic conference, which was mostly praised by economists and other policymakers in attendance. However, some analysts saw strong hints that a rate increase in September is a real possibility.

The government's next price report, to be released just days before the meeting, will likely play an outsize role in determining whether the central bank acts. If inflation remains high, Warsh's credibility could be at risk if he doesn't follow through on his promises.