Federal Reserve Chair Kevin Warsh suggested during his first major speech at Jackson Hole that the central bank may need to raise interest rates in the coming months to bring down inflation, which remains stubbornly above its 2% target. The Fed’s preferred inflation measure stood at 3.7% in July. The yield on the two-year Treasury rose from 4.22% to 4.30% after the speech, and markets now price a rate hike as essentially a coin flip at the September 15-16 meeting. Inflation remains a persistent challenge with 54% of tracked goods and services seeing price increases of 3% or higher, well above the 32% recorded before the pandemic.
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