Warsh signals possible Fed rate hike as inflation holds above 3%

Federal Reserve Chair Kevin Warsh signaled at Jackson Hole that the central bank could raise interest rates if inflation does not cool fast enough, sharpening his stance before the Fed's Sept. 15-16 meeting. Warsh said policymakers must be confident underlying inflation is moving to the 2% goal "at sufficient speed" or "we have work to do." Consumer prices rose 3.4% in July, while the Fed's preferred personal consumption expenditures measure ran at 3.7%. Markets read the speech as hawkish, with federal funds futures implying better-than-even odds of a September increase. Warsh also reaffirmed the 2% inflation target and argued against using detailed forward guidance that could lock the Fed into future moves.