Warsh Signals US Interest Rate Hikes May Be Needed to Combat Inflation

Federal Reserve chair Kevin Warsh has hinted at potential interest rate hikes in the US to combat inflation. In a speech on Friday in Jackson Hole, Wyoming, he stated that inflation remains too high and that the central bank needs to be confident it's moving towards its objective.

Warsh noted that recent economic data shows a slight slowdown, but he doesn't see this as an indication of any change in the underlying trend. The US inflation rate has remained above the Federal Reserve's 2.0% target for more than five years, partly due to the war in Iran and resulting energy crisis.

The Fed last left the key interest rate unchanged at 3.5-3.75% in July, with three out of 12 voting members signaling openness to an interest rate rise later this year to curb inflation. Warsh abstained but reiterated the Fed's commitment to price stability and guaranteeing it.