Warsh Warns: Inflation 'More Concerning' Than Labor Market

Federal Reserve Chairman Kevin Warsh delivered a hawkish speech at the annual Jackson Hole Economic Policy Symposium, expressing concern about high inflation and stating that until 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 noted the latest reading of the central bank's preferred gauge of inflation came in at 3.7% over 12 months, which puts him at odds with President Donald Trump. Trump has brushed off concerns about inflation and insisted prices under his administration have fallen.

Immediately after Warsh's speech, stocks erased 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.