Fed Chair Warsh says US inflation is still too high and opens the door to rate hikes

Latest update from NPR News: The report is now confirmed by NPR News. Federal Reserve chairman Kevin Warsh spoke to a gathering of economists and central bankers at the Jackson Lake Lodge in Wyoming Friday. Natalie Behring/Getty Images North America hide caption Federal Reserve chairman Kevin Warsh remains tight-lipped about where he thinks interest rates are heading — but investors took his tough talk about inflation at a closely-watched speech on Friday as a signal that rates are likely to go higher. Speaking from Jackson Hole, Wyo., Warsh argued that the labor market is stable, investment is strong and consumer spending is resilient. But he also noted that prices are still climbing faster than the central bank — and most people — would like. The consumer price index shows prices have risen 3.4% over the twelve months ending in July, while the Fed's preferred measure puts inflation at 3.7% during that period. "None of these measures are perfect," Warsh said. "But they all tell a similar story: Inflation is running above our 2% target.

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