Big questions and few easy answers for Trumps Fed chair at annual retreat

JACKSON HOLE, Wyo.— There is a lot riding on Federal Reserve Chair Kevin Warsh’s speech here Friday morning at the Fed’s storied annual retreat in the Tetons.Previous Fed chairs have used the annual Jackson Hole address to deliver major policy announcements, and Warsh said last month that he would use the occasion to “frame the big questions” facing the Fed.But just three months into the job, Warsh faces a growing list of more immediate questions for the central bank he leads.InflationThe inflation rate in July was 3.4%, still well above the Fed’s 2% target rate.

And with oil prices showing no sign of returning to pre-Iran war levels this year, pressure is increasing on the Fed to combat that sticky inflation by raising interest rates at its next policy-setting meeting in September.But the Fed under Warsh is widely expected to buck that pressure and hold rates steady next month, a consensus reflected in Fed funds futures contracts.

But that approach has plenty of detractors.Cleveland Fed President Beth Hammack is one of several Fed central bankers who are making the case for raising rates sooner rather than later.“I believe it’s time to act.I think we’ve seen inflation above target for too long,” Hammack said Thursday in an interview on the sidelines of the conference.

Hammack voted to raise rates at the Fed’s last meeting in July, but she was outvoted by fellow members of the Federal Open Market Committee who wanted to keep them steady.In Wyoming, Hammack recounted her recent visit with a group of manufacturing plant workers in Erie, Pennsylvania.They told her that no one expected inflation to move lower in the next year.That kind of sentiment “makes me really nervous,” she said.

“Is this inflationary mindset starting to set in?” Consumers are also seeing everyday costs rise as a result of President Donald Trump’s tariffs, she said.There’s a “concern that prices are going to continue to go up,” she said.

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