Warsh Suggests Interest Rate Hikes May Be Needed to Combat Inflation

Federal Reserve chair Kevin Warsh has hinted that US interest rate hikes may be necessary to ease inflation. Speaking at Jackson Hole, Wyoming, Warsh said that inflation remains too high and needs to come down.

The current inflation rate is 3.4%, which is above the Fed's target of 2%. Warsh attributed this partly to the war in Iran and the resulting energy crisis.

Warsh said that while recent economic data shows a slight slowdown, he does not see this as indicating any change in the underlying trend.

The Fed has left interest rates unchanged for five consecutive meetings since December 2025. Warsh abstained from voting on interest rate changes at the last meeting but reiterated his commitment to price stability.