Warsh Signals Rate Hikes May Be Needed to Combat Elevated Inflation

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

Warsh acknowledged that recent U.S. reports show inflation has cooled a bit, 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 Fed chair's comments reassured Wall Street that fighting inflation remains the priority for the central bank.

Warsh pointed out that inflation remains stubbornly above the central bank's 2% target and is unlikely to move back on its own.