28.08.2026 18:11
Federal Reserve (Fed) Chairman Kevin Warsh signaled a rate hike, stating that inflation is still running too high. Following Warsh's statement, the decline in gold exceeded 1 percent.
Federal Reserve (Fed) Chairman Kevin Warsh said that despite the resilient economy and growing artificial intelligence investments, inflation is still running too high.
"INFLATION STILL AT A CONCERNING LEVEL
Warsh assessed the current economic landscape and monetary policy. Noting that labor markets remain stable and production is strong, Warsh drew attention to the fact that the inflation rate is still at a concerning level.
The Chairman emphasized that the Fed's preferred inflation gauge came in at 3.7 percent over the last 12 months. He added that the six-month change was even higher at 4.1 percent, remaining well above the central bank's strict 2 percent target.
"HAS NOT MEANINGFULLY IMPROVED
Warsh stressed that policymakers need to be confident that core inflation is progressing toward their target at a sufficient pace and clearly. "Although the personal consumption expenditures and consumer price index data released this summer came in better than expected, they do not show me that the underlying trends have meaningfully improved," he said.
He warned that unless this is the case, the central bank still has work to do to ensure price stability, signaling a potential interest rate hike.
On the employment side, he referred to the historically low unemployment rate of 4.1 percent, describing labor markets as consistent with full employment.
The Chairman also touched on the transformative potential of artificial intelligence on the broader economy. He stated that progress in this general-purpose technology is occurring much faster than experts predicted just two years ago.
Noting that AI could become a new factor of production, Warsh said the central bank is closely and carefully monitoring these developments.
GOLD FELL AFTER THE STATEMENT
Following the statement, the decline exceeded 1 percent, with spot gold falling to $4,544 per ounce. Gram gold fell 0.6 percent to 7,076 Turkish lira. Spot silver was trading down 0.4 percent at $68.90.