Warsh Sounds Hawkish on Inflation as Jackson Hole Symposium Kicks Off

Federal Reserve Chairman Kevin Warsh delivered a hawkish message on inflation at the Jackson Hole Economic Policy Symposium, indicating that recent consumer price data does not yet show 'underlying trends have meaningfully improved' toward the Fed's target.

The PCE index is running at 3.7% year over year, and measures of underlying trend inflation have made only modest progress over the past two years, Warsh said.

Warsh pointed to the breadth of price increases within the PCE basket as a key concern, noting that 54% of the 199 individual components showed price gains above 3% over the past 12 months.

The Fed's 2% inflation goal is 'a firm, fixed target,' but Warsh emphasized that 'responsibility for 65 months of sustained, elevated inflation sits squarely with the central bank.'