Warsh Signals Rate Hikes May Be Needed Amid Persistent US Inflation

Federal Reserve Chair Kevin Warsh signaled that interest rate hikes may be necessary to combat stubbornly elevated US inflation, in his first high-profile speech at the Fed's annual conference in Jackson Hole.

Warsh acknowledged that recent reports show inflation has cooled slightly, but emphasized that 'underlying trends have not meaningfully improved.' He stated that inflation remains above the central bank's 2% target and warned that rates may not be high enough to bring it down.

The Fed chair also reiterated his skepticism about providing forward guidance on interest rate policy, which he believes limits the Fed's flexibility. However, some economists argue that he could provide more clarity without revealing future actions.