Trump’s new Fed chair walks fine line on inflation in key speech

Federal Reserve Chair Kevin Warsh said measures of inflation are still elevated, but it is not yet clear that the Fed must take action to address rising prices.

JACKSON HOLE, Wyo. — President Donald Trump’s new Federal Reserve chair said Friday that although measures of inflation are still elevated, it is not yet clear that the central bank must take urgent action to address rising prices.

The speech at the Fed’s yearly retreat at Jackson Hole had been eagerly anticipated after a rocky start to Kevin Warsh’s tenure. Market observers were concerned that he had downplayed the risk of rising prices.

There were also calls for an interest rate hike from economists, including some within the Fed. Trump has routinely called for lower rates that would spark the economy but risk even greater inflation.

Warsh noted that the labor market looks “stable” and said this was one reason that he saw prices as “more concerning.”

The Fed chairman noted that while readings of inflation this summer were “better than expected, they do not tell me that underlying trends have meaningfully improved.”