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Fri, 28 Aug 2026

Fri, 28 Aug 2026 Fed has 'work to do' if price rises don't ease for Americans, Warsh says

Kevin Warsh remarks suggest interest rates could be increased if policymakers think inflation is running too high.

*He said that while inflation readings appeared better than expected over the summer, they didn't show a significant improvement in the current situation.
*Warsh emphasized that his comments should not be taken as guidance for future interest rate decisions, but they could signal an increase in rates if policymakers believe inflation is too high.
*The latest figures showed prices rising 3.4% in the year to July, above the Fed's 2% target, and another key measure was running at 3.7%.
*Warsh's speech sparked a reaction from investors, with expectations of an interest rate rise growing in September according to CME data.
*Analysts believe that Warsh's comments left "the door open to a hike" earlier than previously expected, but hikes are not guaranteed.
*The Fed's next interest rate decision will be made on 15-16 September, and the market is closely watching for any signs of the central bank's approach under Warsh's leadership.
*Warsh also spoke out against "forward guidance," which involves sending signals to markets about future interest rate decisions, stating that it had "overstayed its welcome" and could lead to incorrect predictions.