Federal Reserve Chair Kevin Warsh said Friday that summer inflation data, while better than expected, has not shown a meaningful improvement in the underlying trend. He stressed controlling inflation remains the top priority and said the U.S. economy appears to be strengthening. Treasury yields rose and gold fell after his remarks. CME FedWatch showed the probability of a September rate hike jumped to 45.7%, up sharply from the previous day.
Inflation Progress Not Yet Meaningful
BlockBeats reported that Federal Reserve Chair Kevin Warsh struck a hawkish tone at the Jackson Hole Economic Symposium on Friday, saying that although summer inflation data came in better than expected, it is not yet enough to demonstrate a "meaningful improvement" in the underlying inflation trend. The Fed still needs to confirm that inflation can return to its 2% target quickly enough, he said, or else "there is more work to do."
Warsh said taming inflation remains the central bank's top priority. He also suggested the U.S. economy appears to be strengthening, but did not directly disclose the policy outcome of the September meeting.
September Rate Hike Odds Jump to 45.7%
Treasury yields moved higher and gold fell sharply after the comments, as markets ramped up bets on a September rate increase. CME FedWatch data showed traders pricing in a 45.7% probability of a hike next month, a clear rise from the day before.
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