Fed will have "work to do" if inflation doesn't fade, Warsh says
Summary
Federal Reserve Chairman Kevin Warsh said the Fed is ready to act if inflation does not continue to go down. He noted that inflation is still above the Fed's 2% target and the economy shows mixed signs, with a steady unemployment rate.Key Facts
- Chairman Kevin Warsh spoke at the Fed’s annual conference in Jackson Hole, Wyoming.
- Inflation has cooled recently but remains higher than the Fed’s 2% goal.
- Warsh did not clearly say if the Fed will raise interest rates but hinted they are prepared to do so if needed.
- The economy’s unemployment rate was 4.1% in July.
- Warsh prefers less forward guidance (predicting future Fed moves) to keep the Fed flexible.
- He believes forward guidance, started during the 2008 financial crisis, is no longer as helpful.
- Other Fed officials have shown openness to raising rates soon.
- The CME Group’s FedWatch tool showed a 55% chance the Fed would raise rates in September.
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