Warsh Vows to Tackle Stubborn Inflation as Fed Hikes Rate Hike Odds

Fed Chair Kevin Warsh has warned that inflation is not slowing down and vowed to push it down to the 2% target rate. In a speech at the Jackson Hole Economic Symposium, Warsh said 'we must be confident that underlying inflation is moving to our objective, clearly and at sufficient speed.' He emphasized the need for price stability as the Fed's dual mandate.

Warsh noted that business profits are strong and the labor market appears to be at or near full employment. However, he stressed that the Fed needs to focus on inflation despite some strong economic indicators.

The speech sent a hawkish signal from the Fed, increasing the odds of a rate hike next month to over 55%, according to the CME FedWatch tool. Investors are now weighing the possibility of inflation-fighting interest rate hikes.