All eyes on Fed Chair Warsh during the central bank’s annual conclave in Jackson Hole

Fed Chair Warsh signals rate hikes may be needed with inflation still elevated 1 of 4 | Federal Reserve Board Chairman Kevin Warsh speaks during a news conference at the Federal Reserve in Washington, Wednesday, July 29, 2026. (AP Photo/Mark Schiefelbein) 2 of 4 | Federal Reserve Board Chairman Kevin Warsh speaks during a news conference at the Federal Reserve in Washington, Wednesday, July 29, 2026. (AP Photo/Mark Schiefelbein) 3 of 4 | A sign on the border of Wyoming and Montana appears on the side of Belfry Highway, May 24, 2017, in Powell, Wyoming. (AP Photo/Robert Yoon, File) 4 of 4 | The logo of the Federal Reserve Board of Governors is seen before a news conference with Federal Reserve Board Chairman Kevin Warsh at the Federal Reserve in Washington, Wednesday, July 29, 2026. (AP Photo/Mark Schiefelbein) By CHRISTOPHER RUGABER Updated 4:01 PM MESZ, August 28, 2026 Add AP News on Google Add AP News as your preferred source to see more of our stories on Google. Share Share Facebook Copy Link copied Print Email X LinkedIn Bluesky Flipboard Pinterest Reddit Jackson Hole, Wyoming (AP) — Federal Reserve Chair Kevin Warsh said Friday that inflation is still too high and suggested the central bank may have to raise interest rates in the coming months to bring it down, a clearer signal than he had sent previously about his economic outlook. In his first high-profile speech at the Fed’s annual conference at Jackson Hole, Wyoming, Warsh acknowledged in prepared remarks that recent inflation reports show it has cooled a bit, but “they do not tell me that underlying trends have meaningfully improved.” “We must be confident that underlying inflation is moving to our objective, clearly and at sufficient speed,” Warsh said. “Otherwise, we have work to do.” The Fed chair, who replaced his predecessor, Jerome Powell, May 22, is facing high stakes with his speech as questions have swirled around Wall Street about his focus on fighting inflation. Those concerns may have contributed to rising bond yields. Warsh has said he doesn’t want to provide what analysts call “forward guidance” about whether the Fed will hike or cut rates or stay on hold at upcoming meetings. He argues that it limits the Fed’s flexibility by committing it to a specific policy. Yet some economists have argued that he could say more about his views on Fed policy without tipping his hand about future actions. New Fed chair Kevin Warsh under pressure to clarify views on inflation, interest rates 2 MIN READ Fed leaves interest rate unchanged but with 3 dissents as Warsh praises ‘good family fight’ 4 MIN READ 24 Why Treasury Secretary Bessent’s moves to calm the bond market haven’t worked so far 4 MIN READ 24 Warsh on Friday reiterated his skepticism about providing such guidance or even outlining his broad approach to interest-rate policy. But he did suggest that interest rates currently aren’t restricting economic activity, pointing to robust business investment in AI equipment and infrastructure and strong consumer spending. As a rule of thumb, interest rates often need to be high enough to limit borrowing and spending to cool inflation. The Fed next meets September 15-16, and Warsh’s remarks don’t necessarily signal the central bank will raise rates then. THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below. Jackson Hole, Wyoming (AP) — New Federal Reserve Chair Kevin Warsh has sought a lower profile than his predecessors, yet his speech Friday at the central bank’s annual conclave in Jackson Hole will be one of the most closely watched in years. When Warsh last spoke, in a press conference in late July, he sowed confusion about his willingness to lift interest rates to combat stubbornly high inflation. Longer-term borrowing costs rose on fears that inflation could worsen. What many economists and Wall Street analysts are hoping for is a clear signal on how he thinks the Fed should respond to the ongoing price increases that have caused pervasive gloom for many Americans. Warsh has said he doesn’t want to provide what analysts call “forward guidance” about whether the Fed will hike or cut rates or stay on hold at upcoming meetings. He argues that it limits the Fed’s flexibility by committing it to a specific policy. He also thinks financial markets have become too dependent on such guidance. Yet some economists argue that he could say more about his views on Fed policy without tipping his hand about future actions. The stakes are high for Warsh, who took over the Fed chairmanship May 22 after his predecessor, Jerome Powell, completed his term. Previous Fed chairs have often used speeches at Jackson Hole to address broad questions about interest-rate policy and the economy, or to signal upcoming changes in their approach. In his first Jackson Hole speech in 2018, former chair Jerome Powell discussed the shortcomings behind central banking concepts such as “neutral” interest rates, that neither support nor hinder growth, or maximum employment. By 2022, with pandemic-era inflation having soared to 9.1%, Powell signaled the Fed would continue to sharply raise interest rates in a fight against runaway prices, and he acknowledged that such maneuvers would bring “pain” to consumers and businesses. Most analysts expect the Fed will keep rates unchanged when it meets next in mid-September. Wall Street investors, however, are betting the central bank will hike rates by December, according to futures pricing tracked by CME Fedwatch. inflation cooled in June and July after spiking in May from soaring gas prices, yet it remains above the central bank’s 2% target. According to the Fed’s preferred measure, it was 3.7% in July. Questions swirling around Warsh have also been intensified by President Donald Trump’s continued calls for lower interest rates. While Trump has continued to defend Warsh, whom he appointed and who took office May 22, the president has criticized other Fed officials for supporting higher rates. Trump has also renewed his efforts to remove Fed governor Lisa Cook, who was appointed by former President Joe Biden. Replacing Cook would enable Trump to appoint a majority of the seven-member board. Trump tried to fire her last year but was temporarily blocked by the Supreme Court. If Warsh does assuage some of these concerns, longer-term interest rates could decline slightly. Those rates have steadily risen in recent weeks because of a range of factors, including burgeoning U.S. government deficits and outsize borrowing by tech firms building AI infrastructure. The rate on the 30-year Treasury bond reached the highest level in 19 years last week, prompting an unusual effort by Treasury Secretary Scott Bessent to buy back bonds and push the yields lower. CHRISTOPHER RUGABER Rugaber has covered the Federal Reserve and the U.S. economy for the AP for 16 years. He is a two-time finalist for the Gerald Loeb award for business reporting. twitter mailto