US Fed chair warns inflation progress insufficient, hints at rate hikes
In a closely watched speech in Jackson Hole, Kevin Warsh underscores US Fed’s commitment to tackling inflation, with rate hikes possibly on horizon. United States Federal Reserve Chairman Kevin Warsh said the US central bank will “have work to do” if policymakers are not confident that underlying inflation is returning to its 2 percent target.
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Key Facts
- Fact 1: United States Federal Reserve Chairman Kevin Warsh said the US central bank will “have work to do” if policymakers are not confident that underlying inflation is returning to its 2 percent target.
- Fact 2: CME Group’s FedWatch, which tracks the likelihood of monetary policy decisions, shows a 57.4 percent chance that the central bank will raise rates by 25 basis points at its next meeting in mid-September.
- Fact 3: “It’s the Fed’s job to make sure that inflation expectations do not get unanchored.” Warsh also addressed the Personal Consumption Expenditures Price Index (PCE), the central bank’s preferred metric for gauging the rate of inflation, which remained at 3.7 percent on an annual basis as of July.
- Fact 4: He stressed that inflation shown in the PCE report has been increasing by 3 percent, which is well above pre-pandemic levels.
In a closely watched speech in Jackson Hole, Kevin Warsh underscores US Fed’s commitment to tackling inflation, with rate hikes possibly on horizon. United States Federal Reserve Chairman Kevin Warsh said the US central bank will “have work to do” if policymakers are not confident that underlying inflation is returning to its 2 percent target.
On Friday, Warsh stressed that financial conditions do not appear restrictive enough, the closest he has come to acknowledging that interest rate hikes may be needed to ease price pressures. Parents who lost children to social media harms question Meta settlement Canada welcomes US shift on French language discoverability in trade talks Iran says it will name its terms for reopening Strait of Hormuz Singapore’s plans to clear forest for homes lead to rare public protests “Here is my standard: We must be confident that underlying inflation is moving to our objective, clearly and at sufficient speed,” Warsh said in an address at the Federal Reserve’s Jackson Hole economic symposium in the US state of Wyoming. Warsh did not suggest a timeline for rate hikes and stressed that his comments should not be taken as “forward guidance”.
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