Fed Chair Warsh Signals Possible Rate Hikes to Cut Inflation
Federal Reserve Chair Kevin Warsh spoke Friday in Jackson Hole, Wyoming. He said high inflation should stay a top priority.
Warsh said the country should focus on lowering prices. He said the Fed still has work to do on inflation.
Warsh said the Fed may raise interest rates soon. This would happen if inflation does not fall quickly enough.
He did not say when or by how much rates might rise. Warsh said the Fed was mainly responsible for taming inflation.
Recent inflation data cooled slightly but showed little real improvement. This was his first major Jackson Hole speech as Fed chair.
Warsh also argued against giving markets future policy signals. He said he was impressed by the economy's overall performance.
The two-year Treasury yield jumped as investors reacted to his speech. Bond markets took Warsh at his word about future action.
His July 29 comments had left markets unsure about next steps. President Trump has continued pushing the Fed for lower rates.
Key Terms 3
- Federal Reserve The central bank of the United States, often called the Fed.
- Jackson Hole A place in Wyoming where top economists meet each year.
- Two-year Treasury yield The interest rate on a US government bond that lasts two years.