Warsh Stresses Inflation Priority as Euro Area Policymakers Warn of Rising Pressures

Federal Reserve Chairman Kevin Warsh emphasized that curbing inflation is the central bank's top priority in his keynote speech at the Jackson Hole Economic Policy Symposium.

Warsh's message was clear: policymakers must be confident that underlying inflation is moving towards the Fed's objective of 2%, as measured by the personal consumption expenditures price index, or PCE. He warned that if this confidence is not met, 'we have work to do.'

The new message triggered a jump in expectations for a near-term rate increase, with attention turning to the next round of consumer inflation data due on September 11.

Policymakers from the euro area also sent a warning about inflation, with European Central Bank Governing Council member Primoz Dolenc suggesting that rates may need to be hiked in September.