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Warsh Reaffirms 2% Target as September Hike Looms

8/30/2026

38 7 Full Breakdown

Summary

Story summary

Federal Reserve (Fed) Chairman Kevin Warsh warned inflation has not meaningfully slowed and reaffirmed the 2 percent target.
Two-year Treasury yields rose nine basis points to 4.32%, pushing the implied September hike probability above 50 percent.
President Donald Trump warned the Fed against raising rates before the November midterm elections.
Barclays and Societe Generale said a quarter-point rate increase in September now appears likely.

History

Historical Context

After Jimmy Carter nominated Paul Volcker as Fed chairman in July 1979, Volcker raised the federal-funds rate to a June 1981 peak of 20%, driving inflation from a 14.8% high in March 1980 down to below 3% by 1983 but sparking a recession. Today, Fed Governor Kevin Warsh faces similar political pressure from President Donald Trump ahead of the 2022 midterms, recalling the 1979-80 tightening episode.

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Story summary

Federal Reserve (Fed) Chairman Kevin Warsh warned inflation has not meaningfully slowed and reaffirmed the 2 percent target.
Two-year Treasury yields rose nine basis points to 4.32%, pushing the implied September hike probability above 50 percent.
President Donald Trump warned the Fed against raising rates before the November midterm elections.
Barclays and Societe Generale said a quarter-point rate increase in September now appears likely.

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