Kevin Warsh, from the Federal Reserve, warned that inflation is too high, generating bets in the market that interest rate hikes are coming. The speech was considered hawkish by investors, who interpreted his words as a signal that the American central bank may adopt a more aggressive stance in combating inflation.
Warsh remains silent about which direction he believes interest rates should take, avoiding direct statements about the future path of monetary policy. However, his message on inflation was clear enough to influence market expectations.
Warsh's warning comes at a time of growing concern about inflation levels in the United States, which have remained above the targets established by the Federal Reserve. Investors are now pricing in a higher probability of interest rate hikes at the upcoming meetings of the central bank.
