Warsh Warns US Inflation Remains Elevated as Energy Costs Rise
Speaking at a news conference following the Federal Open Market Committee's decision to maintain its benchmark interest rate within the 3.75% to 4% range, Warsh said discussions during the two-day meeting focused primarily on controlling persistent inflationary pressures.
"Real activity is clearly pointing in the right direction; that's good news, but inflation is too high," Warsh said.
He also highlighted renewed increases in energy costs and related prices, warning that higher expenses in individual sectors must not spread throughout the broader economy or weaken the public's confidence in the inflation outlook.
"Energy and related prices have moved higher again in recent weeks, and our job is to ensure that relative price changes in some sectors do not broaden out across the economy, and that inflation expectations remain as they are anchored," he added.
Despite persistent price pressures, Warsh pointed to stronger economic performance in the United States. Growth estimates for the first half of 2026 were revised upward, with gross domestic product expanding by 2.4%, compared with the previous estimate of 1.8%.
He indicated that economic momentum appeared to strengthen further in the third quarter, supported by consumer spending growth exceeding 3% and business investment increasing at a double-digit rate.
Warsh also noted that capital expenditure accounted for a historically large share of GDP, driven by substantial investment in high-tech industries and broader spending gains across other sectors.
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