Federal Reserve Chair Kevin Warsh signalled that the U.S. central bank could need to raise interest rates if inflation fails to show sufficient progress toward its 2% target, delivering a hawkish message that prompted markets to increase bets on a rate hike as soon as next month.
Warsh's remarks marked his clearest indication so far that higher interest rates could be necessary to bring persistent price pressures under control. He stressed the Fed's commitment to its 2% inflation objective and indicated that policymakers would need to act if underlying inflation does not improve enough.
