Warsh Warns Inflation May Require More Rate Hikes Amid Persistent Price Pressures

Fed Chair Kevin Warsh has signaled that the US central bank may need to do more to contain inflation. Speaking at the Kansas City Fed's annual Jackson Hole symposium, he emphasized that recent improvements in price data have not provided enough evidence of a sustained slowdown.

Warsh stated that his approach would focus on responding to incoming data rather than signaling specific policy decisions in advance. He acknowledged signs of weakness in areas including housing and agriculture but said he would be 'hard pressed' to describe broad financial conditions as restrictive, given the current federal funds rate of 3.5%-3.75%.

The debate within the central bank has centered partly on the causes of persistent inflation. Some policymakers have viewed elevated price pressures as the result of temporary shocks, including tariffs and the Iran war. Others have argued that demand remains strong enough relative to supply to allow businesses to sustain price increases.