"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 the one the otherwise very cautious Warsh has previously given.
Warsh, who took office in May, is giving his first major speech at an annual symposium in Jackson Hole, Wyoming. Economists and investors are now dissecting his every word.
Increased belief in higher interest rates
What the Federal Reserve (Fed) can do about inflation is mainly to raise the key interest rate, a measure that scares investors and would likely anger President Donald Trump, who nominated Warsh as the new Fed chief.
The Fed's inflation target is 2 percent a year.
The next interest rate decision from the Fed will be on September 16. The market has now priced in a 55.5 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 form, 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.
This year, the symposium in Jackson Hole has a strong focus on technical innovation in the economic sector, for example with the help of AI.
