Warsh: Fed Must Act if Inflation Persists
The report discussed statements by the U.S. Federal Reserve Chairman, Jerome Powell, in which he indicated that the central bank may need to raise interest rates if inflationary pressures continue to surpass the 2% target. He explained that inflation is not showing any tangible signs of decline, and the Personal Consumption Expenditures (PCE) price index remains at 3.7% annually as of July, with components from the economic basket accumulating to levels higher than pre-pandemic figures. Powell emphasized that short-term interest rates will remain the primary tools to balance curbing inflation and supporting employment, with investor expectations for a rate hike at the September meeting increasing to about 50%.
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