Warsh’s Jackson Hole speech lifts odds of a September Fed hike

Federal Reserve Chair Kevin Warsh signaled at Jackson Hole that the central bank could raise interest rates if inflation does not cool faster, pushing market expectations for a September hike above even odds. Warsh said recent summer readings were better than expected but did not show underlying price trends had “meaningfully improved.” Consumer prices rose 3.4% in the year through July, while the Fed’s preferred inflation gauge ran at 3.7%, both above the 2% target. He gave no explicit path for rates and argued against detailed forward guidance, calling for a “quieter Fed” that keeps flexibility ahead of the Sept. 15-16 policy meeting. Treasury yields rose after the speech, with the 2-year note climbing sharply.