Fed chair signals inflation remains the central bank’s priority

Federal Reserve Chairman Kevin Warsh said Friday that the central bank must focus on bringing down persistently high inflation, but he stopped short of explicitly calling for an interest rate increase. He said inflation remains above the Fed’s 2% target and that the central bank has more work to do if price growth does not slow clearly and quickly enough.

Warsh said the economy appears to have strengthened, citing solid consumer spending and a steady job market, while housing and agriculture are showing strain. Investors are pricing in about a 35% chance of a Fed rate increase by the end of the year. More than half of capital spending growth this year so far has been tied to artificial intelligence development, he said.

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