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Fed Chair Warsh says inflation remains above target at 3.7%
Fed Chair Kevin Warsh said Friday at the Jackson Hole Economic Symposium that inflation remained high despite a resilient economy and rising investment in artificial intelligence. Warsh said inflation stood at 3.7% over the past 12 months and 4.1% over the six-month period, remaining above the Fed’s 2% target.
Speaking at the Jackson Hole Economic Symposium, Fed Chair Kevin Warsh said inflation remained high despite the economy’s continued resilience and increased investment in artificial intelligence.
Warsh said economic output was strong and labor markets were stable. He said the Fed’s preferred measure of inflation stood at 3.7% over the past 12 months, while the six-month change had risen to 4.1%.
The Fed’s target is 2%
Warsh noted that inflation rates were clearly above the Fed’s 2% target and said monetary policymakers needed to ensure that underlying inflation was approaching that target at a sufficient pace and in a clear manner.
Warsh said personal consumption expenditures and consumer price index data released during the summer had come in better than expected, but added that the results did not point to a meaningful improvement in underlying trends. He said the central bank should continue its efforts to achieve price stability if sufficient progress toward the target was not made in underlying inflation.
Labor market and artificial intelligence
Assessing the employment outlook, Warsh said labor markets were consistent with full employment. He said the unemployment rate stood at the historically low level of 4.1%.
Warsh also highlighted artificial intelligence’s potential to transform the economy. He said progress in general-purpose artificial intelligence technology had been faster than experts had predicted two years ago, adding that the technology could become a new factor of production in the economy and that the Fed was closely monitoring developments.
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