Warsh Warns: Stubborn Inflation Fuels Hawkish Rate Hike Decision

Federal Reserve Chair Kevin Warsh held a press conference after the Federal Open Market Committee (FOMC) decision to raise the Funds Target Range to 3.75%, 4.00%. He sounded hawkish, expressing concerns about stubbornly high inflation.

Warsh noted that inflation trends were not passing the test and that there was little change in the situation. He stated that he must be confident that underlying inflation is moving towards 2% on a timely basis, but this has not been met.

The FOMC removed a dose of accommodation, and Warsh's words pushed the US Dollar Index (DXY) above 100.00 as market participants bet on two more Fed rate hikes by year-end.