Fed Chairman Kevin Warsh Leaves the Door Open for September Rate Hike in Jackson Hole Speech

Federal Reserve Chairman Kevin Warsh left the door open to a possible interest rate hike this fall in his highly anticipated speech in Jackson Hole, WY, on Friday, saying the central bank will have "work to do" if inflation doesn't fall soon.Warsh, speaking for the first time as chairman at the Kansas City Fed's annual economic policy symposium, laid out his vision for a Fed that offers less forward guidance but holds firm to its dual mandate of maintaining price stability and maximum employment.The central banker said that members of the rate-setting Federal Open Market Committee agree: "Labor markets were stable, and output was solid. But inflation remained too high."The Fed uses higher interest rates to fight inflation, and lower rates to stimulate the job market. At last month's FOMC meeting, the majority voted to leave the benchmark rate unchanged at a top range of 3.75%, where it has stood since December. But three members dissented and voted for an increase.The Fed targets 2% inflation as measured by the PCE index, which came in at 3.7% in July. In his comments on Friday, Warsh warned that the Fed would act if that number doesn't come down."We must be confident that underlyi...