Fed's Kevin Warsh warns inflation is too high, sparking bets rate hikes are coming

Federal Reserve chairman Kevin Warsh remains tight-lipped about where he thinks interest rates are heading — but investors took his tough talk about inflation at a closely-watched speech on Friday as a signal that rates are likely to go higher.

Economy A divided Federal Reserve holds interest rates steady despite high inflation Speaking from Jackson Hole, Wyo., Warsh argued that the labor market is stable, investment is strong and consumer spending is resilient. But he also noted that prices are still climbing faster than the central bank — and most people — would like.

The consumer price index shows prices have risen 3.4% over the twelve months ending in July, while the Fed's preferred measure puts inflation at 3.7% during that period.