Kevin Warsh said rates could rise this year if inflation does not cool enough

Trump-appointed Federal Reserve Chairman Kevin Warsh made clear during his Friday appearance at Jackson Hole that interest rates could get hiked this year if inflation refuses to settle down fast enough.

Kevin said summer inflation figures came in cooler than expected, but that was not enough to show the bigger trend had changed. “While this summer’s [inflation] readings were better than expected, they do not tell me that underlying trends have meaningfully improved.” Inflation is running too hot for the Fed to ease up just yet.

Kevin said the central bank wants evidence that inflation is heading back toward its 2% goal quickly enough. “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,” he said.

CME Group (NASDAQ: CME) data showed traders pushing the chance of a September increase to 55.7%, roughly 20 percentage points higher than Thursday. The Fed will announce its next decision on Sept. 16.

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