Warsh Sounds Alarm: Rate Hike Looms as Stock Market Wobbles

Kevin Warsh, Federal Reserve chair, recently delivered a speech at Jackson Hole where he expressed concern about high inflation. He stated that 'we have work to do' and emphasized that the Fed needs to act to curb inflation.

Warsh noted that despite a weaker-than-expected July jobs report, labor markets are consistent with full employment. This leaves little reason to avoid rate hikes, which could help keep surging inflation in check.

The stock market has been in shaky territory lately, and interest rate hikes tend to be unfavorable to the market. However, Warsh's speech suggests that a rate hike is becoming more likely, especially with a 68% chance of a September meeting increase according to CME Group's FedWatch tool.