Federal Reserve Chair Kevin Warsh said recent inflation reports have improved, but not enough to convince him that price pressures are truly fading|@federalreserve|X

After months of keeping his cards close to the vest, Federal Reserve Chair Kevin Warsh finally offered a glimpse into his thinking.

In his closely watched Jackson Hole speech yesterday, Warsh said the Fed will have “work to do” if inflation fails to cool.

His latest comments suggest the central bank may keep fighting higher prices instead of moving quickly toward lower borrowing costs. His speech also implied that an interest rate hike could be on the horizon.

According to analysts, the remarks offered the clearest glimpse yet of Warsh’s outlook since becoming chair, even as he argued that the Fed should keep its plans under wraps.

Inflation still a concern
Warsh gave a revealing read on the current economy. He said recent inflation reports have improved, but not enough to convince him that price pressures are truly fading. He also argued that the Fed should focus on inflation rather than the stable job market, saying that rate hikes are its main tool for restoring price stability.

That message quickly changed market expectations. Traders now see roughly a 58% chance of an interest-rate increase at the Fed’s September meeting, compared with about 35% a day earlier, according to CME Group data.

The remarks also eased concerns that pressure from President Donald Trump could make Warsh hesitant to raise rates.

Bond market feels the impact
The 30-year Treasury yield slipped slightly yesterday and ended at 5.207% after surging to a 19-year high last week, which many experts interpreted partly as a sign of investor doubts about the Fed’s ability to contain inflation through rate hikes. However, the 10-year yield rose to 4.721%, affecting borrowing costs such as mortgages.

Stocks slip
Higher-rate expectations weighed on equities. The Dow fell less than 0.1%, the S&P 500 dropped 0.2%, and the Nasdaq declined 0.5%. The Russell 2000, which tracks smaller companies, fell 1.4%.

His remarks have put September’s meeting under the spotlight as investors look to inflation and economic data for clues about the Fed’s next step.