Warsh Signals Potential Rate Hikes Amid Persistent Inflation Fears

Fed Chair Kevin Warsh signaled that inflation may be too high and interest rates could increase in coming months. Speaking at the annual Jackson Hole Economic Policy Symposium, Warsh acknowledged recent U.S. reports show inflation has cooled slightly but 'they do not tell me that underlying trends have meaningfully improved.'

'We must be confident that underlying inflation is moving to our objective, clearly and at sufficient speed,' Warsh said. 'Otherwise, we have work to do.'

The comments appeared to reassure Wall Street that fighting inflation remains the priority for the central bank. Warsh pointed to data showing inflation remains stubbornly above the 2% target.

Warsh's speech did not imply an imminent rate hike but dismissed perceptions that inflation is no longer a threat. He cited robust business investment in AI equipment and infrastructure and strong consumer spending as indicators that interest rates are not restricting economic activity.