# Fed Chair Warns Inflation May Prompt Rate Hike

- Topic: business
- Source: [CBS News](https://www.cbsnews.com/news/kevin-warsh-fed-speech-jackson-hole-inflation/)
- Published: 2026-08-28
- Original: https://www.cbsnews.com/news/kevin-warsh-fed-speech-jackson-hole-inflation/
- Language: en
- Image: https://assets1.cbsnewsstatic.com/hub/i/r/2026/08/28/31a8315b-e7a5-4897-a596-4f9609e14882/thumbnail/1200x630/5b29c8aa369ed67084d42d714ff52bb5/gettyimages-2291777436.jpg

## At a glance

- Warsh warned the Fed may raise rates if inflation fails to fall toward the 2% target.
- He highlighted the economy's resilience, citing a 4.1% unemployment rate and solid growth despite price pressures.
- Market expectations show a 55% chance of a rate hike at the September 15‑16 meeting, per CME FedWatch.
- Warsh criticized forward guidance, saying it limits policy flexibility and has overstayed its welcome since the crisis.

## Sources

- [CBS News](https://www.cbsnews.com/news/kevin-warsh-fed-speech-jackson-hole-inflation/)

## The story

Federal Reserve Chair Kevin Warsh signaled that the Fed may raise rates if inflation does not continue to ease during his Jackson Hole speech. Warsh said inflation remains above the 2% target, despite recent cooling, and that the central bank must be confident that underlying price pressures are moving toward the goal. He cautioned that the Fed will act if inflationary pressures persist, while also noting that the economy's performance, including a 4.1% unemployment rate, remains solid. Warsh avoided giving explicit guidance on the timing of a rate hike, but analysts interpreted his remarks as opening the door to a possible increase later this year. The FedWatch tool from CME Group showed a 55% probability that rates would rise at the September 15‑16 meeting, reflecting market expectations. Warsh also criticized the use of forward guidance, arguing that it limits the Fed's flexibility and has overstayed its welcome since the crisis. He emphasized that the Fed will respond to changing conditions rather than committing to a predetermined path, a stance that has drawn mixed reactions from economists. The speech underscored the Fed's commitment to lowering consumer prices while leaving open the possibility of future tightening if inflation does not meet the 2% target.

> Summary by Daily Read Bytes. [Read the original source](https://www.cbsnews.com/news/kevin-warsh-fed-speech-jackson-hole-inflation/)