WARSH PUTS INFLATION FRONT AND CENTER

Fed Chair Kevin Warsh struck a hawkish tone, saying the Fed’s priority must remain price stability.

Warsh said summer inflation data improved, but underlying trends have not meaningfully changed. The Fed must be confident inflation is returning to target—or “we have work to do.”

He reaffirmed the 2% PCE inflation target as “firm and fixed.”

Meanwhile, the economy remains resilient: consumer spending is healthy, labor markets are stable and business investment is rising rapidly.

Warsh also said financial conditions are difficult to describe as restrictive, with credit markets showing few signs of policy restraint.

At the July meeting, a “good majority” favored waiting before changing rates.
(@WalterBloomberg)