Fed chair signals a possible rate hike if inflation stays high

Federal Reserve Chair Kevin Warsh said the central bank would have “work to do” if inflation fails to cool, offering his clearest signal yet that interest rates could rise soon.

Markets reacted by increasing the implied odds of a rate hike at the Fed’s September meeting from 35% to 58%. The yield on the two-year government bond also rose from 4.24% to as high as 4.36%. Fed officials will weigh another inflation reading before deciding on rates.

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