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Kevin Warsh flags worries about underlying inflation at Jackson Hole

The Federal Open Market Committee kept its benchmark rates at 3.5% to 3.75% and is set to meet again Sept. 15 to 16.

Reported · Written up by our desk · Central Banks

New Federal Reserve Chairman Kevin Warsh told policymakers at the Jackson Hole Economic Symposium that he is focused on ensuring underlying inflation moves to the Fed’s 2.0% target at a sufficient speed, while declining to signal whether a rate hike is coming next, Commercial Observer reported.

Warsh said the Fed’s recent inflation readings from the personal consumption expenditures measure and the consumer price index have come in better than expected, but that underlying inflation trends have not improved enough to be considered meaningful.

He also emphasized that the Fed aims to follow a discipline rather than a predetermined path, and reiterated his view of changing the central bank’s forward guidance approach that markets use to interpret data.

During Warsh’s first two meetings, the FOMC kept its benchmark interest rates at between 3.5% and 3.75%, and markets have priced in about a 50.0% chance of a hike ahead of the Sept. 15 to 16 meeting, according to Commercial Observer.

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