Warsh Signals Possible Rate Hikes to Contain Inflation

Fed Chair Kevin Warsh signaled that the US central bank may need to do more to contain inflation. He argued that recent improvements in price data have not provided enough evidence of a sustained slowdown.

In his first speech as Fed chair at the Kansas City Fed’s annual Jackson Hole symposium, Warsh emphasized the importance of being confident that underlying inflation is moving toward its 2% target at a sufficient pace. Without that confidence, he said, “we have work to do.”

The current federal funds rate is 3.5%-3.75%, which does not appear to be placing significant restraint on the broader economy, according to Warsh.