Warsh warns inflation is still too high, lifting near-term rate expectations
Federal Reserve chair Kevin Warsh used his first Jackson Hole keynote address to warn that inflation is running too hot for comfort, firming expectations that the central bank could raise rates this autumn, and driving the dollar higher. In an address that subtly departed from market expectations for continued neutrality, Warsh said “I am impressed by the overall performance of the economy, which appears to have strengthened,” and noted that labour markets remain “quite stable,” but signalled that policy may not yet be restrictive enough given that inflation is still running above target. “While this summer’s PCE (personal consumption expenditures)...