Fed chair signals ‘work to do’ on high US inflation
WASHINGTON: US Federal Reserve chair Kevin Warsh on Friday offered rare insight into his economic outlook, flagging that high inflation in the world’s largest economy was “concerning” and hinting that the central bank may need to act to curb it. Warsh, appointed by US President Donald Trump and in office since May, was kicking off a key central banking meeting in Jackson Hole, Wyoming — a storied…
US Federal Reserve Chair Kevin Warsh expressed on Friday that high inflation in the United States was "concerning," hinting at potential action to curb it during a key central banking meeting in Jackson Hole, Wyoming. Warsh emphasized that current financial conditions were not restrictive, implying possible interest rate hikes. He committed to discipline rather than a specific decision.
The Fed has not met its 2% inflation target for over five years, currently sitting at 3.7% in the latest measure. Warsh stressed the central bank's focus should be on prices and that "otherwise, we have work to do." He noted the economy's overall performance, strong business capital expenditures, corporate earnings, and consumer spending.
Warsh also highlighted the positive aspects of the current unemployment rate and expected full employment. He touched on AI's impact on the economy and the central bank's ongoing investigation into its effects. Warsh's speech did not mention the Fed's independence, which has been under attack by President Trump. He reiterated that the Fed needs clear, unfiltered market signals, emphasizing the importance of transparency in communications about future policy decisions.
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