Fed Chair Kevin Warsh: Inflation Still Too High, Price Stability Remains the Priority

According to Odaily Planet Daily, Bitcoin News reported on X that Federal Reserve Chair Kevin Warsh said in his first Jackson Hole address that the U.S. economy has strengthened and remained resilient, and that the Fed must stay focused on bringing inflation down. Warsh said the labor market is consistent with full employment, citing a 4.1% unemployment rate and initial jobless claims near multidecade lows. He noted that inflation remains well above the Federal Reserve's 2% goal: the Personal Consumption Expenditures (PCE) Price Index rose 3.7% over the past year, while the annualized rate over the past six months was 4.1%. In the PCE basket, 54% of items increased by more than 3% over the past year, which he said points to broad-based inflation. He added that recent better-than-expected inflation readings have not persuaded him that underlying trends have improved materially. He also pointed to easy financial conditions, with credit spreads still low and lending standards relatively loose, saying credit markets show little evidence that policy tightening is biting. "I find it difficult to describe overall financial conditions as restrictive," he said. Warsh said the Fed should keep its primary focus on prices and reiterated that a 2% inflation rate is a "firm and fixed goal." He also described the Fed's forward guidance as "outdated" and said markets should no longer look to the central bank as the main source for the next trade. On the bar for easing, Warsh said the Fed needs to be confident that underlying inflation is moving "clearly and sufficiently quickly" toward target; otherwise, "we still have work to do." He closed by saying, "I stand here today to uphold discipline, not to make a decision."