Fed Chair Kevin Warsh warns on inflation at Jackson Hole

Fed Chair Kevin Warsh warns on inflation at Jackson Hole

Fri, August 28, 2026 at 5:18 PM GMT+3 2 min read

Federal Reserve Chairman Kevin Warsh warned Friday that the central bank may not be finished fighting inflation, saying recent price readings had not convinced him that underlying trends were improving and stopping short of any commitment on the path for interest rates.

"We must be confident that underlying inflation is moving to our objective, clearly and at sufficient speed," Warsh said in prepared remarks delivered at the Federal Reserve's annual symposium in Jackson Hole, Wyoming. "Otherwise, we have work to do."

Speaking on his 100th day as chairman, Warsh described an economy he said "appears to have strengthened," with business and consumer spending holding up and a slowdown in hiring he attributed to a flattening labor supply. But on inflation, he said financial conditions did not look restrictive to him. "I would be hard pressed to describe broad financial conditions as restrictive," he said, according to the Wall Street Journal.

Warsh also pointed to the breadth of price increases. About half the items in the Fed's preferred inflation basket are rising faster than 3%, compared with roughly a third in the two decades before the pandemic. The Fed's current benchmark rate stands at a target range of 3.5% to 3.75%.

As in prior appearances, Warsh declined to offer either forward guidance or a reaction function — the economic conditions that would prompt a policy response. He addressed the criticism directly in the text of the speech, asking rhetorically whether he should at least commit to an explicit reaction function. His answer: "Our knowledge just doesn't extend that far — at least not yet — and the factors most relevant to the proper conduct of monetary policy change over time."

"I stand here today committed to a discipline, not to a decision," Warsh said.

Bond yields climbed following the 10 a.m. ET publication of the speech, while equities showed little reaction.

Warsh's speech at Jackson Hole drew on a broader communications philosophy he has pressed since taking office in May. Warsh has withheld both forward guidance and any definition of his reaction function since becoming chairman, leaving markets to interpret incoming data without explicit cues from the Fed. He has launched five task forces examining various aspects of Fed operations and again invoked his signature phrase calling for a "quieter Fed, more purposeful in its communications."

Warsh's remarks broke with how prior Fed chairs have approached Jackson Hole, a venue his predecessors typically used to telegraph rate moves or introduce significant shifts in the central bank's framework. A year ago, then-Chair Jerome Powell used the same forum to suggest rate reductions were coming, a signal that sent stocks surging, according to CNBC.

Markets are pricing in about a one-in-three probability of a rate increase at the September 15–16 meeting, according to CNN.