Warsh Signals Rate Hikes May Be Needed to Combat Persistent Inflation

Federal Reserve Chairman Kevin Warsh sent a clear signal that interest rate hikes may be necessary to bring down inflation, as he warned that price pressures are unlikely to ease on their own.

In his speech at the Fed's annual conference in Jackson Hole, Wyoming, Warsh said inflation is still too high and that even though it has cooled somewhat recently, the data do not show underlying trends have improved.

The Fed chair emphasized that more than half of the goods and services tracked in government data have increased in price by 3% or higher over the last year, highlighting the persistent nature of inflationary pressures.

Warsh's comments came as a growing list of Fed officials have signaled they may need to raise rates soon to restore price stability. Three officials voted to raise rates at the July meeting and others have said they are considering doing the same, arguing that rates are not holding back economic activity.