Warsh Takes Aim at Inflation with Hawkish Tone

US Federal Reserve Chairman Kevin Warsh has spoken out on his inflation-fighting strategy at an event in Jackson Hole, Wyoming. His speech was seen as a way to quiet concerns about the Fed's direction, but it also set up a potentially bigger test three weeks from now.

The central bankers gathered for the weekend arrived unsure how much Warsh would reveal about his view of the economy. Warsh had been criticized after last month's meeting for not explaining how the Fed's current stance would bring down inflation. Kristin Forbes, a former Bank of England policymaker, said investors should be careful reading the speech as a signal.

Warsh defended July's decision to postpone a rate hike by citing new information on supply chains, investment flows, and geopolitics rather than making arguments for why the current stance is appropriate. He warned that absent soft August data, holding in September would put him back where he was in July, explaining a decision without a satisfying rationale.