Warsh is under pressure to clarify whether current inflation is a problem and,
if so, how policy should respond. On Thursday some of his Fed colleagues voiced
continued concern about persistent U.S. inflation. Government data on Wednesday
showed July headline inflation unchanged year‑on‑year, marking the 65th
consecutive months above the Fed’s 2% target. The Fed’s preferred gauge, core
PCE, was up 3.3% YoY in July; monthly core PCE rose to 0.2% in July from 0.1% in
June. The stronger‑than‑expected data modestly increased market odds of a Fed
rate hike as soon as next month.
