Warsh Warns High Inflation 'Concerning' Ahead of Interest Rate Hikes

US Federal Reserve Chair Kevin Warsh expressed concern over high inflation in the US economy, stating that 'the numbers are more concerning' and hinting at potential interest rate hikes to curb it. In a speech kicking off a key central banking meeting in Jackson Hole, Wyoming, Warsh emphasized the importance of price stability and noted that the current inflation rate is 3.7 percent, well above the Fed's target of two percent.

Warsh also highlighted the need for the central bank to focus on underlying inflation trends, stating that 'we must be confident that underlying inflation is moving to our objective, clearly and at sufficient speed.' He added that he would be 'hard pressed' to describe current financial conditions as 'restrictive,' a potential hint that interest rate hikes could be on the horizon.

Despite his concerns over inflation, Warsh praised the overall performance of the US economy, noting improvements in business capital expenditures, corporate earnings, and consumer spending. However, he acknowledged that unemployment has remained relatively steady at 4.1 percent, which he said is 'broadly consistent with full employment.'