Fed Chair Hints at Rate Hike, Citing Inflation Concerns

[Anchor]

The chair of the U.S. Federal Reserve has stated that current inflation indicators are a cause for concern. Interpreted as a hint that the central bank could embark on interest rate hikes, Wall Street closed lower.

From New York, this is Kim Hyunwoo.

[Reporter]

During his keynote speech at the Jackson Hole Economic Symposium, U.S. Federal Reserve Chair Kevin Warsh said that recent inflation readings remain above the Fed's 2 percent target.

Taking full responsibility for the high inflation that has persisted for 65 months, he assessed that overall financial conditions cannot currently be considered tight.

[Kevin Warsh / Federal Reserve Chair: Price stability does not happen on its own, and inflation does not necessarily mean-revert. Price stability is the Fed's mandate. There are no excuses.]

This is interpreted as a hint that the Fed, which has frozen its benchmark interest rate for five consecutive times this year alone, could soon raise rates to curb inflation.

However, Chair Warsh did not mention a specific timeline for a rate adjustment during his speech.

Additionally, Warsh stated that the current system in which the market reacts and investors alter decisions based on a single word from the Fed should not be left unchecked.

He repeatedly emphasized that he will change the practice of the Fed signaling its policy direction in advance.

[Kevin Warsh / Federal Reserve Chair: When the Fed speaks less and clarifies the purpose of its messages, it can achieve its policy objectives more effectively.]

Following news that benchmark interest rates could rise, U.S. Treasury yields all rose, and all three major New York stock indices closed lower.

(Video Reporting: Lee Heehoon, Video Editing: Kim Yunsung)
※ Please note: This article was translated by AI and may contain errors.