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Warsh said the Fed may need to tighten policy if inflation does not move back to its 2% target, signaling a firmer stance on rates.
- Federal Reserve Chair Kevin Warsh suggested on Friday that the Fed may have to raise interest rates in the coming months, stating inflation is still too high.
- Warsh acknowledged recent reports "do not tell me that underlying trends have meaningfully improved," insisting the Fed must be confident inflation is moving toward its 2% target.
- Current interest rates aren't restricting activity, Warsh noted, citing robust consumer spending and business investment; rates must limit borrowing to effectively cool inflation.
- Wall Street investors are betting the Fed will hike rates by December, according to CME Fedwatch data, though Warsh's remarks don't necessarily signal rate increases soon.
- Treasury Secretary Scott Bessent recently attempted to lower Treasury bond yields after they hit a 19-year high, while comparisons persist to Jerome Powell, who navigated 9.1% inflation in 2022.
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The new US Federal Reserve Chief Kevin Warsh suggests for the first time that there may soon be higher interest rates because of persistent inflation. He thus also distances himself from Donald Trump.
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Politico broke the news in Arlington County, United States 2 days ago on Friday, August 28, 2026.