Warsh Sounds Hawkish at Jackson Hole, But September Hike Still Uncertain

Federal Reserve Chairman Kevin Warsh emphasized fighting inflation in his debut speech at the annual economic symposium in Jackson Hole, Wyoming. He stated that 'price stability is not self-executing, nor is inflation necessarily mean-reverting. It is the Fed's job to deliver stable prices.'

The bond market responded with muted expectations of a September rate hike, which rose to nearly 60% from below 40%. Economists say the key determinant could be what the next round of inflation data shows.

Warsh's speech was seen as hawkish, but some analysts argue that he may still opt for a September pause to gather more data. Preston Caldwell, senior US economist for Morningstar, stated that 'it seems very likely that Warsh will hike by the October meeting.'