Warsh Opens Door for Fed Rate Hike, Says Inflation Still High, Must Move Toward 2% Target

Money & Banking··US·Read original
4▲2 ▼1Impact / 5
Summary · why it matters

Federal Reserve Chairman Kevin Warsh said in a speech at the Jackson Hole meeting that inflation remains high and must move clearly and quickly toward the 2% target. This led markets to increase the probability of a rate hike in September to 55.7%, according to CME FedWatch data. Warsh avoided committing to forward guidance and called on the Fed to communicate more purposefully. Meanwhile, the 2-year Treasury yield surged nearly 8 basis points to 4.31%, the highest since late July. Economists see Warsh as opening the door for a rate hike, which may not occur in September but could happen in October or December.

Impact on assets 3

Others± Mixed