Summary of Wash's Remarks: Potential inflation must clearly and rapidly return to the 2% target, with price stability as the top priority.

Fed Chair Kevin Warsh delivered his first speech at the Jackson Hole symposium, emphasizing that policymakers must confirm core inflation is moving toward the 2% target—otherwise, more work lies ahead. He noted financial conditions cannot be described as restrictive, and inflation data has not shown significant trend improvement, adding the Fed’s current primary focus should be on prices, with forward guidance playing a limited role. Warsh also pointed out the likelihood of the economy achieving substantially higher growth is rising, urging market participants to focus on real economic information rather than outdated or inaccurate data when crafting forward-looking policies. He reiterated the Fed will bring inflation back to its 2% target, calling it a clear, fixed goal. “My standard is that we must be confident underlying inflation is moving toward our target, and the pace must be sufficiently clear and rapid. Otherwise, we still have work to do—that is our duty,” he said. Warsh further stated current financial conditions are not restrictive, with interest rates serving as the Fed’s primary tool for fulfilling its mandate. “Although this summer’s PCE and CPI data came in better than expected, they have not convinced me a meaningful improvement in the underlying inflation trend has occurred,” he noted. “Market prices reflect confidence that we will achieve price stability, and I can assure you the market’s judgment is correct.” Adding that with inflation above 2%, the Fed’s “current top priority should be prices,” Warsh stressed another key point: “Price stability will not automatically be achieved, nor will inflation necessarily return on its own. Delivering price stability is the Fed’s responsibility.”