Warsh Signals Rate Hikes May Be Needed to Combat Stubborn Inflation

Fed Chair Kevin Warsh signaled that interest rate hikes may be needed to combat stubbornly elevated US inflation, according to his speech at the annual Jackson Hole Economic Policy Symposium. He acknowledged that recent data show inflation has cooled slightly but emphasized that underlying trends have not improved.

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

The comments reassured Wall Street that fighting inflation remains the central bank's priority. Warsh did not imply a rate hike was imminent but appeared to dismiss perceptions that inflation is no longer a threat.