Federal Reserve Chairman Kevin Warsh today said that the central bank will likely continue to focus on fighting inflation, which continues to remain persistently above the Fed’s 2% target.
“We must be confident that underlying inflation is moving to our objective, clearly and at sufficient speed,” Warsh said at the Fed’s annual symposium in Jackson Hole, Wyoming. “Otherwise, we have work to do. That’s our job, our mandate and our charge to keep.”
The Federal Open Market Committee has not adjusted the federal funds rate since December 2025, when the committee voted to lower the rate by 25 basis points. However, three FOMC members voted against holding the rate steady at its last meeting in July, instead arguing that persistent inflation justifies raising the rate.
Warsh cautioned that his speech shouldn’t be considered forward guidance and repeated his concern that the Fed has over-communicated its intentions in the recent past. But when it came to fulfilling the Fed’s dual mandate of maximum employment and stable prices, he said the latter currently takes precedence.
While there may be future labor disruptions, “as of now, I believe the labor markets are consistent with full employment,” Warsh said. “But on the price-stability side of our mandate, the numbers are more concerning… None of these measures are perfect, but they all tell a similar story: Inflation is running above our 2% target. So the Fed’s predominant focus right now should be on prices.”
