WORLD
US Fed Chairman Kevin Warsh hints at rate hikes if prices do not ease
- IBJ Bureau
- Aug 30, 2026
The US central bank will “have work to do” if policymakers do not get the confidence they need that inflation is heading down to 2 per cent, Federal Reserve Chairman Kevin Warsh has said.
This is the closest Mr Warsh has come to acknowledging that interest rate hikes may be needed to ease price pressures.
“Here is my standard: We must be confident that underlying inflation is moving to our objective, clearly and at sufficient speed. Otherwise, we have work to do. That’s our job ... our mandate ... and our charge to keep,” Mr Warsh has said in the keynote speech to the Fed’s Jackson Hole economic symposium in Wyoming.
With the labour market stable, inflation too high and little in financial conditions to indicate that the Fed’s policy rate is restraining it, the US Fed chief has said, “The Fed’s predominant focus right now should be on prices.”
The remarks have drawn applause from an audience of global central bankers hungry for more than his previous vague promises to deliver price stability and unsettled by his refusal to say how he would do so.
Markets have heard the change in tune and moved to increase bets on a rate hike next month even as they still price in a healthy dose of scepticism that he will deliver it.
“We are moving up on six years where we have been above target” on inflation, former Philadelphia Fed President Patrick Harker has said.
“You can’t keep saying this is our job” and then not act. “As the old saying goes, actions speak way louder than words,” he adds.
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