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Warsh signals US Fed may need to raise rates if above-target inflation lingers
The US central bank will “have work to do” if policymakers are not confident that underlying inflation is returning to its 2 per cent target, Federal Reserve Chairman Kevin Warsh said on Friday in remarks that acknowledged financial conditions do not appear restrictive and marked the closest he has come to acknowledging interest rate hikes may be needed to…
GlobeSignal-AImedium certainty
- Why it matters
- If the Fed raises rates, borrowing costs rise for households and businesses, slowing economic activity and affecting hiring and spending.
- Most affected
- Households carrying variable-rate debt — Monthly payments would increase on mortgages, credit cards, and loans.
Prospective borrowers — Cost of taking on new debt—for homes, cars, education—would rise. - Likely next
- Whether Warsh or other Fed officials issue further statements clarifying the likelihood of rate moves at upcoming policy meetings.