Warsh Signals Possible Rate Hike to Tackle Inflation at Jackson Hole

The US Federal Reserve's (Fed) chair, Kevin Warsh, emphasized the importance of fighting inflation during his speech at the Jackson Hole economic conference in Wyoming. He stated that an interest rate hike is on the horizon if necessary to keep inflation under control.

Warsh made clear that he will raise rates to achieve the Fed's 2% inflation target, citing the recent price index figures as evidence of a need for action. In July, the 12-month inflation rate rose to 3.4%, with 54% of goods and services showing price increases above 3%.

The Fed chair noted that this level of inflation is higher than in the two decades preceding the COVID-19 pandemic. He attributed the current high levels of inflation to the central bank's own failure, stating 'the responsibility for 65 months of sustained, elevated inflation sits squarely with the central bank.'