Warsh to Deliver Keynote at Jackson Hole Amid Inflation Fears

New Federal Reserve Chair Kevin Warsh has been relatively low-key in his tenure so far, but his speech at the central bank's annual conclave in Jackson Hole will be closely watched by economists and Wall Street analysts.

Warsh's last public appearance was a press conference in late July, where he sowed confusion about his willingness to raise interest rates to combat stubbornly high inflation. Longer-term borrowing costs rose on fears that inflation could worsen.

Economists are hoping for a clear signal from Warsh on how the Fed should respond to ongoing price increases, which have caused widespread gloom among Americans.

In his first Jackson Hole speech in 2018, former chair Jerome Powell discussed the shortcomings behind central banking concepts such as 'neutral' interest rates. By 2022, with pandemic-era inflation soaring to 9.1%, Powell signaled that the Fed would continue to sharply raise interest rates to fight runaway prices, acknowledging this would bring 'pain' to consumers and businesses.

Most analysts expect the Fed will keep rates unchanged when it meets next in mid-September, but Wall Street investors are betting on a hike by December, according to futures pricing tracked by CME Fedwatch.