Federal Reserve Chair Kevin Warsh discussed inflation remaining above the Fed’s target at the Jackson Hole Economic Policy Symposium on August 28. After his remarks, the U.S. two-year Treasury yield and expectations for a September rate hike moved higher, but an actual rate increase cannot be considered certain based on Warsh’s comments alone.
Key Points from Warsh’s Jackson Hole Remarks
Warsh explained that the Federal Reserve’s price-stability mandate is a fixed 2% target based on the personal consumption expenditures (PCE) price index. He added that the 12-month increase in PCE inflation at the time was 3.7%, while the six-month increase was 4.1%—both above the target.
The key issue is that inflation remains above target and whether there is confidence that underlying inflation is moving toward the target at a sufficient pace.
Warsh said recent summer PCE and CPI figures had been better than expected, but he judged that it was difficult to conclude that the underlying inflation trend had improved meaningfully. He also said the Fed still had work to do if it lacked confidence that underlying inflation was moving clearly and sufficiently toward the target.
Has a Rate Hike Been Confirmed?
No decision has been confirmed yet. Warsh explained that his remarks were a commitment to principles, not a preview of a specific rate decision. The Associated Press likewise assessed that the comments did not indicate an imminent rate hike.
The confirmed points at this stage are:
- The Federal Reserve’s inflation target is 2% based on PCE.
- The PCE inflation rates cited by Warsh were above the 2% target.
- Further improvement in underlying inflation was presented as a condition for policy judgment.
- Whether rates will be raised at the September 15–16 FOMC meeting has not yet been decided.
How Did the Market React?
According to the Associated Press, the U.S. two-year Treasury yield moved from 4.22% to 4.30% after Warsh’s remarks. The market-implied probability of a rate hike at the September 15–16 FOMC meeting also rose to roughly half.
However, these figures reflect the market reaction at the time of the AP report. Warsh’s comments alone cannot determine the direction of South Korean lending rates or exchange rates. New economic data and the FOMC’s assessment remain key variables that could change the rate outlook.
Background on the Person and Institution
Chair Warsh delivered the keynote speech at the Jackson Hole Economic Policy Symposium hosted by the Federal Reserve Bank of Kansas City on August 28, 2026. The 2026 symposium was held in Jackson, Wyoming, from August 27 to 29.
Sources and verification date:
- [Official speech from the Federal Reserve](https://www.federalreserve.gov/newsevents/speech/warsh20260828a.htm) — checked August 29, 2026
- [Federal Reserve Bank of Kansas City event page](https://www.kansascityfed.org/research/jackson-hole-economic-symposium/2026/) — checked August 29, 2026
- [AP News report](https://apnews.com/article/federal-reserve-warsh-interest-trump-inflation-ab8dfdf808df3a5a3fa8b943ac5f3867) — checked August 29, 2026