Warsh at Jackson Hole: US Inflation Remains 'Too High' and Fed Has Work to Do

The new US Federal Reserve Chair, Kevin Warsh, confirmed in his opening speech at the annual Jackson Hole conference that the inflation rate in the United States remains "too high," noting that the central bank "has more work to do" to achieve price stability.

Warsh's speech came during this year's edition of the annual economic symposium hosted by the Kansas City Fed in Wyoming, a venue closely watched by investors and economic analysts to gauge the trajectory of US monetary policy.

Financial markets reacted immediately to Warsh's remarks, as the US dollar rose and expectations for near-term interest rate cuts receded, while US bond yields posted a noticeable increase.

Warsh explained that the fight against inflation is not over yet, and that the Fed will continue to rely on economic data in making its decisions, emphasizing that maintaining the central bank's credibility requires patience and resolve in the face of inflationary pressures.

What do these terms mean?

Federal Reserve: The US central bank responsible for formulating monetary policy and setting interest rates to support price stability and achieve full employment in the US economy.

Jackson Hole Conference: An annual economic symposium organized by the Federal Reserve Bank of Kansas City in Wyoming, bringing together central bank governors and senior economists, where global monetary policy directions are often announced.

Inflation: A sustained rise in the prices of goods and services over time, which reduces the purchasing power of money. Governments usually measure it using the Consumer Price Index (CPI).