Warsh Warns: Inflation Concerns Spark Interest Rate Hike Fears

Federal Reserve Chairman Kevin Warsh expressed concern about high inflation in a speech at the Jackson Hole Economic Symposium on August 28, 2026. He stated that until he and his colleagues are confident that inflation is moving toward their 2% target rate 'clearly and at a sufficient speed,' they 'have work to do.'

Warsh's hawkish remarks led to stocks erasing daily gains, and the probability of an interest rate hike at the Fed's next meeting in mid-September nearly doubled. According to CME FedWatch, as of Friday afternoon, the market saw a 57% chance of a quarter-point increase.

The chairman expressed confidence in the state of the labor market and comfort with a 4.1% unemployment rate but noted that the latest reading of the central bank's preferred gauge of inflation came in at 3.7% over 12 months.