Fed has 'work to do' if price rises don't ease for Americans, Warsh says

What the report says

Federal Reserve Chair Kevin Warsh signaled in his first speech at the Jackson Hole Economic Policy Symposium in Wyoming that the US central bank may still need to act if inflation does not continue to ease. According to BBC World News, Warsh said recent inflation readings looked better over the summer but did not show a meaningful improvement, and he framed price stability as the Fed’s main priority for now.

Warsh stressed that his remarks were not intended as forward guidance on the next interest-rate move. Even so, his comments were widely read as a sign that policymakers could consider raising rates if they conclude inflation remains too high. The latest figures cited by BBC World News showed US prices rising 3.4% over the year to July, above the Fed’s 2% target.

The report said Warsh also criticized the practice of giving markets detailed signals in advance, arguing that it can limit the Fed’s flexibility. He is expected to influence the central bank’s next rate decision, due on 15-16 September.

More broadly, the article placed his remarks against a backdrop of higher borrowing costs, recent oil-price pressures and concerns about the effects of interest rates on mortgages, car loans, credit cards and government debt. BBC World News noted that Warsh was appointed by President Donald Trump in May.