Federal Reserve Chair Kevin Warsh indicated during a speech that the central bank may raise interest rates if inflation does not decline quickly, according to a report by NRC - Nieuws, achtergronden en onderzoeksjournalistiek. Warsh said that if price growth does not slow soon, the Fed would need to act, the Dutch outlet reported.
The comments were made at the annual Jackson Hole symposium, a gathering of central bankers and economists, as reported by Het Financieele Dagblad. Warsh expressed concern about inflation but also said the Fed was keeping its options open, according to NOS.
The remarks come as European and U.S. stock markets posted weekly gains despite worries about inflation, De Telegraaf reported. NU also covered Warsh's stance, noting that he believes the U.S. central bank should focus on fighting inflation.
Warsh's comments suggest a shift in tone from the Fed, which has faced pressure to balance price stability with economic growth. The Jackson Hole speech is closely watched by investors for signals about future monetary policy, and this year's address appears to lean toward a more hawkish approach.
The Fed has not yet announced any specific timeline for a potential rate increase, and Warsh's language left room for interpretation. His warning, however, marks a clear departure from recent messaging that emphasized patience.
What to watch next: whether upcoming inflation data in the coming weeks will push the Fed to follow through on Warsh's hinted rate hike.
