For Kevin Warsh, ‘big questions’ and few easy answers at Fed’s

Federal Reserve Chair Kevin Warsh’s speech at the bank’s Jackson Hole retreat offers him a chance to outline an inflation strategy and boost his credibility.

JACKSON HOLE, Wyo. — There is a lot riding on Federal Reserve Chair Kevin Warsh’s speech here Friday morning at the Fed’s storied annual retreat in the Tetons.

Previous Fed chairs have used the annual Jackson Hole address to deliver major policy announcements, and Warsh said last month that he would use the occasion to “frame the big questions” facing the Fed.

But just three months into the job, Warsh faces a growing list of more immediate questions for the central bank he leads.

The inflation rate in July was 3.4%, still well above the Fed’s 2% target rate. And with oil prices showing no sign of returning to pre-Iran war levels this year, pressure is increasing on the Fed to combat that sticky inflation by raising interest rates at its next policy-setting meeting in September.

But the Fed under Warsh is widely expected to buck that pressure and hold rates steady next month, a consensus reflected in Fed funds futures contracts.