Warsh Warns: Elevated Inflation 'Concerning' for US Economy
US Federal Reserve Chairman Kevin Warsh has expressed concern over elevated inflation in the US economy. Speaking at a key central bankers' meeting in Jackson Hole, Wyoming, Warsh stated that high inflation is 'concerning'. The Fed's preferred gauge of inflation came in at 3.7% this week, surpassing its long-term target of 2% for more than five years.
Warsh emphasized the central bank's focus on price stability, saying that they must be confident underlying inflation is moving towards their objective 'clearly and at sufficient speed'. He added that he would be hard pressed to describe current financial conditions as 'restrictive', which could hint at potential interest rate hikes.
The Fed has held rates steady through 2026, but a growing faction of policymakers have called for interest rate hikes to combat inflation fueled by US President Donald Trump's policies. Warsh noted that the economy appears to have strengthened in other areas, with metrics showing growth in business capital expenditures, corporate earnings, and consumer spending.