Warsh Puts Rate Hike Pressure on Fed Ahead of September Meeting

At the annual Jackson Hole economic conference, Federal Reserve Chair Kevin Warsh opened the door to potential rate hikes in the coming months by renewing his inflation-fighting credentials. In a speech on Friday, he noted that underlying inflation hasn't 'meaningfully improved,' despite some decline in gas prices.

This has raised expectations for a hike next month and put pressure on the central bank to increase interest rates when it meets in mid-September, if inflation doesn't improve by then. The government's next price report, due just days before the meeting, could play an outsize role in determining whether the Fed acts.

Warsh's comments were mostly praised afterward by economists and other Fed policymakers in attendance, but there was also some pushback and criticism during the first day of the conference. His speech highlighted the potential for artificial intelligence to strongly boost the economy, which could reduce pressure on the Fed to lift rates.