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Warsh Warns Rates May Rise as Inflation Stays High

8/29/2026

43 8 Full Breakdown

Summary

Story summary

Fed Chair Kevin Warsh warned inflation remains above the Fed’s 2 % target and rates may need to rise on August 28, 2026.
July personal-consumption-expenditures inflation was 3.7 % YoY and core PCE inflation 3.3 % YoY.
CME Group’s FedWatch tool showed a September rate-hike probability of about 55 % after Warsh’s remarks.
Warsh said the Fed will adopt a quieter approach and will not provide forward guidance on future rate moves.

History

Historical Context

After stagflation drove U.S. consumer prices to a 14.8% peak in March 1980, Paul Volcker raised the federal funds rate to a record 20% by June 1981, triggering a deep recession. In August 2026, Fed chair Kevin Warsh warned that core PCE inflation still exceeds the Fed’s official target, reviving concerns that another Volcker-style tightening could strain Treasury financing and corporate investment.

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Story summary

Fed Chair Kevin Warsh warned inflation remains above the Fed’s 2 % target and rates may need to rise on August 28, 2026.
July personal-consumption-expenditures inflation was 3.7 % YoY and core PCE inflation 3.3 % YoY.
CME Group’s FedWatch tool showed a September rate-hike probability of about 55 % after Warsh’s remarks.
Warsh said the Fed will adopt a quieter approach and will not provide forward guidance on future rate moves.

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