Warsh flags possible Fed rate hike as inflation stays at 3.7%
What's new: Market odds of a September increase rose from about one-third to better than even after his Jackson Hole speech.
Federal Reserve Chair Kevin Warsh signaled Friday that the central bank could raise interest rates in coming months if inflation does not cool faster, sharpening his message in a closely watched speech at Jackson Hole, Wyoming. Warsh said the Fed's main focus should remain on prices and reaffirmed the 2% inflation target as a "firm, fixed target." He argued current rates are not broadly restrictive, citing resilient consumer spending and strong business investment. The Fed's preferred inflation gauge ran at 3.7% in July, and Warsh said 54% of price components have risen at least 3% over the past year, well above pre-pandemic norms. The Fed next meets Sept. 15-16.