Fed Chair Warsh Warns Inflation Fight Is Not Over at Jackson Hole, Sparking Rate-Hike Bets and Friday Stock Selloff

Federal Reserve Chair Kevin Warsh said Friday at the central bank's annual Jackson Hole retreat that inflation remains too high and the Fed "has more work to do," driving markets to price in a September rate hike. Speaking at Jackson Lake Lodge in Wyoming, Warsh said the labor market looks stable and consumer spending is resilient, but warned that "underlying trends" in inflation have not meaningfully improved, calling persistent price pressures "more concerning" in light of economic strength. He declined to provide forward guidance on future rate moves, consistent with his stated policy, but the hawkish tone was enough to shift investor expectations, with a majority now anticipating a rate increase at the September meeting.

U.S. stocks fell on the news: the S&P 500 lost 0.3%, the Nasdaq Composite dropped 0.5% weighed down by semiconductor stocks, and the Dow Jones Industrial Average finished marginally lower. Despite Friday's pullback, all three major indexes ended the week with gains.