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Real-time News
August 28th - According to the Associated Press, Federal Reserve Chairman Warsh said on Friday that inflation remains too high. He hinted that the central bank may need to raise interest rates in the coming months to reduce inflation. This statement more clearly reflects his view on the economic situation than his previous remarks. In a prepared speech at the Jackson Hole Economic Symposium, Warsh acknowledged that recent inflation data indicated a slowdown in inflation, but "these data do not suggest a significant improvement in the overall trend." "We must be confident that underlying inflation is moving toward the target, or there is still a lot of work to be done." On Friday, Warsh remained skeptical of forward guidance and even declined to reveal his overall thinking on interest rate policy. However, he did point out that current interest rate levels are not hindering economic activity.On August 28th, Federal Reserve Chairman Warsh stated on Friday that if policymakers are not confident that inflation is falling back to 2% "at a clear and sufficiently fast pace," the Fed "still has work to do." This suggests that if price pressures do not improve, the Fed may raise interest rates next. Warsh explicitly stated that he still adheres to the Feds long-standing policy path of managing inflation by adjusting interest rates. This significantly increases the likelihood of a further rate hike by the Fed, which could potentially create a rift with President Trump, who has long sought rate cuts. This statement essentially eliminates the ambiguity previously left. At a press conference at the end of July, Warsh declined to comment extensively on whether a rate hike was needed to address the sharp rise in inflation this year, which has been above the Feds target for more than five consecutive years.The main liquefied petroleum gas (LPG) contract rose by 2.00% during the day, currently trading at 5883.00 yuan/ton.New York gold futures fell below $4,600 per ounce, down 1.21% on the day.On August 28th, Federal Reserve Chairman Warsh warned that inflation has not shown a meaningful slowdown, stating that policymakers must be confident that inflation is moving in the right direction, otherwise the central bank "has more work to do." Warsh reiterated that the Fed will bring the inflation rate back to its 2% target. He stated that this is a clear and fixed target. Warsh said, "My standard is that we must be confident that underlying inflation is moving toward our target, and the pace must be clear enough and fast enough. Otherwise, we have more work to do. Thats our responsibility." Warsh also stated that current financial conditions are not restrictive, and interest rates are the Feds "primary tool" for fulfilling its mandate.
