Warsh Shift Points To September Hike as Fed Appetite for Rate Increases Grows

The Federal Reserve's stance has shifted from holding off on interest rate hikes unless necessary to increasing rates unless they can justify not doing so, according to Kevin Warsh's recent speech at the Jackson Hole Symposium. This change in attitude suggests that the Fed is considering a rate hike to ensure inflation returns to target. While some macro projections suggest the Fed can afford to be patient, the shift in stance indicates an appetite for a hike.

Warsh's comments have made it more likely than not that the Federal Reserve will raise interest rates in September. This development contrasts with previous views that the Fed would hold off on hikes unless necessary.

The writer notes that while they see no need for a series of hikes, the shift in stance by Warsh signals an increased appetite for rate increases.