Warsh Sounds Inflation Alarm: Fed Hikes Interest Rates in September?

Federal Reserve Chair Kevin Warsh has sounded the alarm on inflation in the United States, calling current price increases 'preoccupying' and signaling that the central bank's fight for stable prices is far from finished.

The PCE price index, the Fed's favorite inflation gauge, climbed 3.7% over the year through July, well above the central bank's stated 2% target.

Warsh noted during his keynote address that summer price readings came in slightly better than expected, but this does not prove that underlying trends have meaningfully improved.

The era of cheap money is unlikely to return soon, especially with a Federal Reserve chair who views current inflation readings as an urgent threat rather than a temporary bump in the road.