US Federal Reserve Chairman Kevin Warsh said that inflation in the United States remains excessively high, even though the economy continues to show resilience and investment in artificial intelligence is increasing.
Speaking at the Jackson Hole Economic Symposium on Friday, Warsh discussed the country’s economic conditions and the Fed’s monetary policy. He said that employment remained stable and economic output was strong, but inflation continued to be a major concern.
According to Warsh, the Fed’s preferred inflation measure was 3.7% over the previous 12 months, while the six-month rate reached 4.1%, both significantly above the Federal Reserve’s 2% target. He stressed that policymakers need stronger evidence that underlying inflation is moving toward the target at an appropriate pace.
Warsh noted that recent personal consumption expenditures and consumer price index figures were better than expected, but he argued that these figures were not enough to confirm a meaningful improvement in underlying inflation. He warned that the Fed would have more work to do if inflation failed to show sustained progress.
Regarding employment, Warsh said the labor market appeared to be close to full employment, pointing to a historically low unemployment rate of 4.1%.
He also highlighted the growing importance of artificial intelligence, saying its development has progressed faster than many experts expected two years ago. The Fed is closely monitoring AI because it could become an important new factor of production and influence the wider economy.
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