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Warsh sharpens inflation warning at Jackson Hole
Federal Reserve Chairman Kevin Warsh delivered a more hawkish assessment of inflation at Jackson Hole on Friday, prompting traders to increase bets on an interest rate hike at the Federal Reserve's September meeting. Warsh said elevated prices should remain the central bank's primary focus and described financial conditions as not broadly restrictive, a shift from his July news conference, when he characterised conditions as uneven. “We can be held accountable for delivering on our remit - the only true test of our credibility,” Warsh said. The Fed will not meet to decide interest rates until mid-September, and Warsh stopped short of explicitly signalling what policymakers would do at the meeting. Warsh also reaffirmed the Fed's commitment to its 2% PCE inflation target. "there should be no misunderstanding: The Fed's price-stability objective of 2 percent, as measured by the personal consumption expenditures (PCE) price index, is a firm, fixed target. Let's be equally clear about another aspect of the objective: Price stability is not self-executing, nor is inflation necessarily mean-reverting. It is the Fed's job to deliver stable prices." United States personal consumption expenditures (PCE) inflation stood at
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Fed's Hammack: 'Now is the time to act' on rates
Cleveland Federal Reserve President Beth Hammack on Thursday reiterated her call for higher interest rates, saying persistent inflation means the central bank needs to act. Hammack told CNBC that a report released on Wednesday showed inflation running at around 3% on an annualised basis. While the monthly pace of price increases has slowed in recent months, she said inflation remains too high and monetary policy should be tightened. “I don’t want to prejudge anything. But I believe now is the time to act,” she said in a live CNBC interview from the Fed’s annual symposium in Jackson Hole, Wyoming. “I believe that we’ve been in an inflationary situation for more than five years. It’s been running well above our target. I don’t see any restriction in policy when I look at financial conditions and when I talk to market participants.” Hammack made similar comments at the Federal Open Market Committee's July meeting, when she was one of three policymakers who dissented from the decision to keep the Fed's policy rate in a range of 3.5%-3.75%. The three preferred a 25-basis-point rate increase. She said the Fed still needs to take action against inflation, which is putting pressure on household budgets. “The longer in
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RBA minutes: Board debated August interest rate hike
The nine-member policy board of Australia's central bank was divided over whether to raise interest rates at its August meeting, with minutes showing some policymakers believed the current cash rate of 4.35% was sufficiently restrictive to bring inflation down while allowing time to assess how the economy evolves. The Reserve Bank of Australia's (RBA) board unanimously decided to keep rates unchanged after considering the case for a fourth increase this year. The minutes cautioned that incoming data would need to show further progress towards returning inflation to the RBA's 2% to 3% target within a reasonable timeframe. On the global policy outlook, policymakers noted that markets expected interest rates in many advanced economies to rise over the next 18 months, amid concerns about persistent underlying inflation pressures. "Members noted that expected increases in policy rates were larger where monetary policy was more accommodative, such as in New Zealand, Canada and Japan, and smaller elsewhere, such as in Australia, the United States and the United Kingdom. "In the United States, resilient demand and persistent inflation had supported a higher expected path for policy rates over time, although the most recent
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Fed minutes: Rate hike possible if inflation persists
Federal Reserve officials indicated at their July meeting that interest rates may need to rise if inflation fails to cool further, according to minutes released on Wednesday. “Many participants assessed that policy tightening would likely be necessary if inflation did not decline,” the minutes said. “Some participants commented that financial conditions might not currently be sufficiently restrictive to facilitate a return of inflation to 2 percent.” The Federal Open Market Committee voted 9-3 to keep interest rates steady in a target range of 3.5%-3.75%, where it has remained throughout the year. The three dissenting officials favoured a 25-basis-point rate increase. The minutes said the dissenters “judged that doing so would likely help forestall the need for a steeper and potentially more costly sequence of tightening moves at a later stage”. The three dissenting votes came from regional Fed presidents Beth Hammack of Cleveland, Lorie Logan of Dallas and Neel Kashkari of Minneapolis. Since the July meeting, inflation data have generally shown modest monthly price increases, although key measures remain above the Fed's 2% target. The personal consumption expenditures price index, the central bank's prefer
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Pressure mounts on Warsh's Fed as officials flag hikes
Recent comments from United States Federal Reserve officials have raised the prospect of further interest rate increases, even as this week's inflation data pointed to easing price pressures and reduced market expectations for a September hike. U.S. consumer prices rose 3.4% annually in July, down from 3.5% in June, while core CPI eased to 2.5%. Producer prices were unchanged during the month, below expectations for a 0.2% increase. However, inflation remains well above the Fed's 2% target, while the ongoing US-Iran conflict has created uncertainty over the outlook for energy prices and broader inflation. Markets had initially hoped the increase in energy prices associated with the conflict would prove transient. However, with the war continuing and the Strait of Hormuz largely closed, the risk of a more persistent inflation shock appears to be rising.Credit: Federalreserve / flickrHammack calls for immediate rate hikeCleveland Federal Reserve President Beth Hammack reiterated on Thursday that the central bank should raise interest rates to curb inflation and restrain business growth and investment. "When I'm talking to businesses, I hear that businesses are excited to raise funds, they're excited to borrow so th

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Renewed Iran war raises global rate hike risks
The resurgence of the United States-Iran conflict has reignited fears of a global inflation shock, forcing central banks to reconsider their interest rate paths as higher energy prices threaten to prolong price pressures and weaken economic growth. Markets had been positioning for a softer inflation environment after a fragile ceasefire between Washington and Tehran briefly eased concerns over oil supply disruptions. However, renewed military escalation has pushed crude prices sharply higher, reviving the prospect of a stagflationary shock similar to previous energy crises. The conflict has placed central banks in a difficult position: raising rates could help contain inflation expectations but risks worsening already fragile growth conditions. The Reserve Bank of Australia (RBA) is among those facing renewed pressure. The Guardian reported, citing ANZ forecasts, that market pricing now suggests the probability of a rate increase has almost doubled, with traders assigning a nearly 30% chance of a hike on 12 August, up from 16% two weeks earlier. The probability of a rate increase by November has risen to 80%, according to the forecasts. Brent crude has climbed around 23% over the past two weeks, approaching US$90
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Warsh vows Fed 'regime change' to tackle inflation
Federal Reserve Chair Kevin Warsh on Tuesday reaffirmed his commitment to overhauling the United States central bank's approach to monetary policy, describing inflation as an "unfair burden" on households and businesses and pledging what he called a "regime change" at the Federal Reserve. Warsh, who took office two months ago, said the central bank has already begun implementing broad reforms, including the creation of five internal task forces to review key areas of the Federal Reserve's operations. The groups will examine the Fed's communications strategy, technology, balance sheet, economic data collection and analysis, and its framework for assessing inflation. “In six weeks, we have caused, I think, a sea change in new thinking-the beginning of a set of reforms that are going to be put in place across at least five dimensions in monetary policy,” he said. “We made a lot of progress in six weeks, but I think it’s important to use this opportunity wisely.” Fed chairs are required to testify before Congress twice each year to present the central bank's monetary policy report and answer lawmakers' questions. Addressing lawmakers, Warsh said the current period represents a pivotal moment for the institution. “
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IMF cuts 2026 outlook; war and AI reshape economy
The International Monetary Fund (IMF) has lowered its 2026 global growth forecast, warning that the world economy faces continued risks from the Middle East conflict, trade fragmentation and a potential correction in artificial intelligence-driven market expectations. The IMF now expects the global economy to expand 3.0% in 2026, down from its April forecast of 3.1%, before growth rebounds to 3.4% in 2027. The forecast remains below the 3.5% average growth recorded in 2024 and 2025. The lender said the global economy had so far avoided a sharper slowdown, with strong demand for artificial intelligence and related technologies helping offset the economic impact of disruptions to energy supplies caused by the war in the Middle East. However, the IMF warned that inflation pressures were likely to remain elevated, raising its 2026 global headline inflation forecast by 0.3 percentage points to 4.7% from April. Inflation is expected to ease to 3.9% in 2027. Energy prices remain a key driver of the outlook, with the IMF noting that prices were around 25% higher than before the war began on 28 February and expected to remain elevated. The updated forecast assumes the Strait of Hormuz will begin reopening in mid-July, with s
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World Bank warns on slowing growth, AI divide
Global economic growth is set to slow to 2.5% this year, marking its weakest pace since the Covid-19 pandemic, as geopolitical tensions and rising inflation continue to weigh on the outlook, according to the World Bank Group. In its latest Global Economic Prospects report, the Washington-based institution downgraded growth forecasts for two-thirds of countries, warning that higher borrowing costs and disruptions linked to conflict in the Middle East are threatening to drag on global activity. The World Bank estimates global growth at 2.7% in 2025, with a further slowdown expected this year. Inflation is projected to rise to 4% in 2026, up from 3.3% in 2025, as energy and commodity markets remain vulnerable to supply shocks. Average fertiliser prices are also forecast to climb sharply, with increases of up to 38% expected due to disruptions in supply chains linked to the Strait of Hormuz and broader energy market instability. The World Bank warned that developing economies, excluding major Asian growth engines such as India and China, risk a prolonged period of weak convergence with advanced economies. It described the 2020s as potentially a “lost decade” for much of the developing world if structural constraints