US central bank chief says short-term interest rates act as a main policy tool
US Federal Reserve Chairman Kevin Warsh walks into the opening dinner of the annual economic symposium in Jackson Hole, Wyoming, on Aug 27, 2026. (Photo: Reuters)
JACKSON HOLE, Wyoming - The US Federal Reserve will “have work to do” if policymakers are not confident that underlying inflation is returning to its 2% target, 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 ease price pressures.“Here is my standard: We must be confident that underlying inflation is moving to our objective, clearly and at sufficient speed. Otherwise, we have work to do. That’s our job … our mandate … and our charge to keep,” Warsh said in remarks prepared for delivery to the Fed’s annual Jackson Hole economic symposium in Wyoming.
While much of the 16-page address focused on large issues, like the influence of artificial intelligence, that Warsh feels will be critical in the long run, it also included some key acknowledgements — including that “short-term interest rates are the predominant tool to achieve the dual mandate.”
