Warsh Warns Inflation Remains Elevated Amid Strong Economic Growth

Federal Reserve Chairman Kevin Warsh signaled a shift in focus for the central bank at the annual Jackson Hole symposium, prioritizing inflation over employment. In his keynote address, Warsh emphasized that inflation remains too high and should be the Fed's predominant focus.

According to Warsh, the 12-month change in the PCE price index stands at 3.7 percent, while the six-month change is 4.1 percent. The comparable measures from the consumer price index (CPI) are also elevated, as are the core measures of both PCE and CPI inflation.

Warsh noted that a significant portion of the components in the PCE inflation basket posted price increases above 3 percent over the past year, but acknowledged that inflation expectations remain largely stable in medium-term measures and financial-market pricing.