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Fed Chair: US inflation 'concerning,' monetary policy not 'restrictive'
🇵🇦 Panama /Economy & Trade

Fed Chair: US inflation 'concerning,' monetary policy not 'restrictive'

From TVN Panamá · () Spanish

Translated from Spanish and summarized by DistantNews. Read the original for the full story.

At a glance

News Named sources Context piece
  • Federal Reserve Chair Kevin Warsh called US inflation 'concerning,' stating monetary policy is not yet 'restrictive' enough.
  • The Fed has not met its 2% inflation target for over five years, with the PCE index at 3.7%.
  • Warsh acknowledged positive economic indicators, including business investment and consumer spending, and noted the US is at 'full employment' with a 4.1% unemployment rate.

Federal Reserve Chair Kevin Warsh described inflation in the United States as 'concerning' and indicated that the central bank's monetary policy could hardly be called 'restrictive' as it approaches its next interest rate meeting. The Fed has struggled to achieve its long-term inflation goal of 2% for more than five years.

We must be confident that underlying inflation is moving toward our target, clearly and at a sufficient speed. Otherwise, we have work to do.

— Kevin WarshStressing the need for clear progress on inflation.

This week, the personal consumption expenditures (PCE) price index, the Fed's preferred inflation gauge, stood at 3.7%. Speaking at the Jackson Hole meeting of central bankers, Warsh emphasized that the Fed's 'predominant focus' should be on prices. "We must be confident that underlying inflation is moving toward our target, clearly and at a sufficient speed. Otherwise, we have work to do," he stated.

On balance, I could hardly describe financial conditions as restrictive.

— Kevin WarshAssessing the current state of monetary policy.

Regarding interest rates, Warsh commented, "On balance, I could hardly describe financial conditions as restrictive." The Federal Reserve has kept interest rates stable throughout 2026. However, a growing number of policymakers are advocating for rate hikes to combat inflation, which has been fueled by President Donald Trump's tariff policies and his actions concerning Iran.

I am impressed by the overall performance of the economy, which appears to have strengthened.

— Kevin WarshCommenting on positive economic indicators.

Despite inflation concerns, Warsh also highlighted positive economic aspects. "I am impressed by the overall performance of the economy, which appears to have strengthened," he declared, citing indicators such as business capital spending, corporate profits, and consumer spending. He also noted that the US has achieved 'full employment,' with the current unemployment rate of 4.1% being 'consistent with full employment.' Warsh also touched upon the impact of artificial intelligence, calling the current moment 'a turning point in history.'

In what concerns the employment aspect within the Federal Reserve's dual mandate, our country is doing well.

— Kevin WarshDescribing the state of employment in the US.
About this summary

Originally published by TVN Panamá in Spanish. Translated, summarized, and contextualized automatically by DistantNews, with a note on how the source frames the story. Not individually reviewed before publishing. How this works.

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