"We must be confident that underlying inflation is moving toward our target, clearly and at a sufficient pace. Otherwise, there is work to be done," Warsh said, according to a transcript of his remarks, the AP news agency reported.
His remarks are a clearer signal on interest rates than Warsh has previously given.
Warsh, who took office in May, is giving his first major speech at the annual symposium in Jackson Hole, Wyoming.
Increased belief in higher interest rates
What the Federal Reserve (Fed) can do about inflation is mainly raise the key interest rate, a measure that would likely anger President Donald Trump, who nominated Warsh as the new Fed chief - and which scares investors.
After a positive opening on Friday, the New York Stock Exchange fell into the red after the speech was published.
The Fed's inflation target is 2 percent per year. At the Jackson Hole meeting, Warsh confirmed the 2 percent level as a "firm, unwavering target."
The next interest rate decision from the Fed will be on September 16. The market has now priced in a 59.7 percent probability of a 0.25 percentage point increase to a range of 3.75-4.00 percent, according to the research firm CME FedWatch.
Before the publication of Warsh's speech, that proportion was just over 35 percent.
“Devoted to a method”
At the same time, Warsh, true to his habit, was careful to avoid clarity about what measures he believes are required to meet the Fed's dual mandate: low inflation and full employment.
“I stand here today committed to a method, not a specific decision,” he says.
The Jackson Hole meeting is also being held as the US national debt has climbed above a staggering $40 trillion for the first time. In addition, the yield on US Treasury bonds has been stubbornly creeping upward, a trend that continued even after Warsh's speech.
This year, the symposium in Jackson Hole has a strong focus on technological innovation in the economic sector, for example with the help of AI.
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