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Fed Chair Warsh signals rate hikes may be needed with inflation still elevated

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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Politico broke the news in Arlington County, United States on Friday, August 28, 2026.
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