Fed chair says persistent inflation could require higher interest rates

Federal Reserve Chair Kevin Warsh said inflation remains too high and suggested the central bank might need to raise interest rates in the coming months. He said recent cooling in inflation had not shown meaningful improvement in underlying trends.

Warsh said inflation remains above the Fed’s 2% target, while the central bank’s preferred measure stood at 3.7% last month. He said inflation data were more concerning than job-market trends and unlikely to return to target on their own.

Investors viewed the chances of a rate hike at the Fed’s next meeting as roughly even after the remarks, up from about one-third beforehand. Warsh said a rate increase was not imminent and declined to provide specific guidance on future policy decisions.

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