‘Inflation is too high and has been for too long,’ says Kevin Warsh as Fed announces rate hikes - live

Key Points:

• Federal Reserve official Kevin Warsh emphasized that inflation remains too high and persistent, justifying the recent interest rate hike despite some summer inflation readings not showing meaningful improvement.
• Major US stock indexes dropped following Warsh's comments, with the S&P 500 down 0.9% and the Dow falling 850 points, while US Treasury yields showed mixed movements and the dollar index rose 0.6%.
• Political reactions were divided: Republican Jason Smith criticized the rate hike amid economic growth and lower inflation compared to the Biden era, while Democrat Brendan Boyle blamed former President Trump’s tariffs and Iran war for fueling inflation.
• Warsh reaffirmed the Fed's independence, stating the rate decision was based on economic assessment rather than market pressures or political influence, and declined to comment on President Trump’s calls for rate cuts.
• Analysts foresee the Fed may implement additional rate hikes later in the year, with inflation driven largely by energy prices, and stress the importance of maintaining monetary policy discipline to achieve stable prices and a durable economic expansion.