Fed Chair Kevin Warsh Signals Concern Over Inflation in Jackson Hole Speech
In his speech at the Jackson Hole Economic Symposium on August 28, Federal Open Market Committee (FOMC) chair Kevin Warsh expressed continued concern over inflation. He emphasized that underlying trends remain worrisome and indicated a willingness to take further action if necessary: 'We have work to do.' The remarks reignited speculation about a potential September rate hike. Warsh noted that while recent Personal Consumption Expenditures (PCE) and Consumer Price Index (CPI) data were better than expected, they did not signal meaningful improvement in inflation trends. He highlighted that over half of the 199 PCE components showed price increases above 3% year-over-year—well above pre-pandemic levels. The market reacted swiftly to his comments, with the probability of a September rate hike rising from around 35.5% to nearly 57.5%. However, Warsh's stance remains fluid and subject to further data developments in coming months.
Topics: Federal Reserve FOMC inflation interest rates