Warsh Signals High Inflation May Require Rate Hikes
US Federal Reserve Chair Kevin Warsh delivered a speech in Jackson Hole, Wyoming, flagging concerns about high inflation in the world's largest economy. He stated that the numbers are 'more concerning' on the price-stability side of their mandate and hinted at potential interest rate hikes to curb inflation.
Warsh emphasized the central bank's focus on prices, saying they must be confident that underlying inflation is moving towards the 2 percent objective at sufficient speed. The current reading of the preferred gauge is 3.7 percent, and Warsh noted that recent data does not suggest meaningful improvement in underlying inflation trends.
The Fed has held rates steady through 2026, but a growing faction of policymakers calls for hikes to combat inflation fueled by President Donald Trump's policies. Warsh highlighted the overall performance of the economy, citing business capital expenditure, corporate earnings, and consumer spending as positives.