Warsh at Jackson Hole says inflation is still too high and he is committed to a discipline, not a decision

Chairman Kevin Warsh delivered prepared remarks titled In Our Time on August 28, 2026, at the Federal Reserve Bank of Kansas City’s Jackson Hole symposium, “Financial Innovation: Implications for Payments and Policy,” in Jackson Hole, Wyoming. He marked his 100th day as Chairman. The Federal Reserve Board posted the text the same day. This is not a rate decision. Warsh did not announce a hike or a cut. He closed: “I stand here today committed to a discipline, not to a decision.”

The news is the first Jackson Hole keynote of his chairmanship, not a new FOMC vote. Warsh said inflation is running above the Fed’s 2 percent PCE target, so the Fed’s predominant focus right now should be on prices. The 12-month PCE price index stands at 3.7 percent; the six-month change is 4.1 percent. Labor markets, he said, are consistent with full employment, with the unemployment rate at 4.1 percent. On financial conditions, he said he would be hard pressed to describe broad financial conditions as restrictive. The July 29, 2026 FOMC statement, cited here as context, had maintained the federal funds target range at 3-1/2 to 3-3/4 percent on a 9–3 vote. That hold is already public. These remarks do not re-vote it.

The Board posted the prepared text of In Our Time on August 28, 2026, Last Update August 28, 2026. That posted text is the number of record for this page. Warsh spoke at the Kansas City Fed symposium in Jackson Hole, Wyoming, on the topic Financial Innovation: Implications for Payments and Policy, and marked his 100th day as Chairman.

What he did not decide

These remarks are not a rate decision and not a new FOMC vote. The July 29, 2026 statement had maintained the federal funds target range at 3-1/2 to 3-3/4 percent by a 9–3 vote. Beth M. Hammack, Neel Kashkari, and Lorie K. Logan dissented, preferring a 1/4 percentage point increase. Warsh said the July minutes recorded a unanimous view that labor markets were stable, output was solid, and inflation remained too high, and that a good majority waited for intermeeting information. That unanimous view of the economy is not the 9–3 vote on the funds-rate range. This page does not collapse those two records.

Inflation and the dual mandate

Warsh said the Fed’s price-stability objective of 2 percent, as measured by the personal consumption expenditures price index, is a firm, fixed target, and that price stability is not self-executing. The 12-month change in the PCE price index stands at 3.7 percent, while the six-month change is 4.1 percent. Comparable CPI measures are also elevated, he said, as are the core measures of both PCE and CPI inflation. “Inflation is running above our 2 percent target. So the Fed’s predominant focus right now should be on prices.” Summer PCE and CPI readings were better than expected, he said, but they do not tell him that underlying trends have meaningfully improved. Of 199 PCE components, 54 percent showed increases above 3 percent over the past 12 months, below the post-pandemic high of about 77 percent and above about 32 percent in the two pre-pandemic decades. Over the past six months annualized, 49 percent showed increases above 3 percent. Medium-term inflation expectations, by and large, look stable, he said. “The responsibility for 65 months of sustained, elevated inflation sits squarely with the central bank.” His standard: confident that underlying inflation is moving to the 2 percent objective, clearly and at sufficient speed — otherwise, work to do.

How he reads the economy

Overall performance “appears to have strengthened,” he said. The four-quarter change in investment in equipment and intangibles has been around 9 percent, the highest since 2021, and more than half of this year’s capital-expenditure growth can likely be ascribed to the AI buildout. For firms in the S&P 500, profits have grown by more than 20 percent over the past year. Credit spreads are near the low ends of their historical ranges, and the July Senior Loan Officer Opinion Survey put commercial and industrial loan standards on the easier end of their historical range. Housing and agriculture are showing strains. “I would be hard pressed to describe broad financial conditions as restrictive.” Real consumer spending increased more than 2 percent over the past four quarters. Private domestic final purchases increased at a pace of nearly 3 percent so far this calendar year. The unemployment rate, at 4.1 percent, has changed little for a couple of years. Labor markets, he said, are consistent with full employment.

Forward guidance

Forward guidance as a regular practice should be limited in normal times, he said. It was essential in the Global Financial Crisis and has “overstayed its welcome.” Transparency is not a virtue unto itself; communications serve getting policy right. He rejected a mechanical reaction function or a Taylor-rule promise. He described a hall-of-mirrors problem: markets watching the Fed, the Fed watching markets. He called for “a quieter Fed, more purposeful in its communications.” Short-term interest rates are the predominant tool; unconventional policy may suit genuine crises and should otherwise be used sparingly, if at all. “Money matters.”

AI and future policy

Warsh framed artificial intelligence as a potential new factor of production. He said a task force on productivity and jobs exists; its recommendations will come later and have no bearing on current policy. Citing reports, he said annualized token sales for the two leading labs alone were more than $100 billion — an increase of 500-plus percent from a year ago. He did not name those labs. This page does not name them either.

Why it matters

This is the first Jackson Hole keynote of Warsh’s chairmanship. The locked policy stance is a discipline, not a decision. He kept 2 percent PCE as a firm target, described labor as consistent with full employment, and declined to call broad financial conditions restrictive. Those are his August 28, 2026, characterizations. They are not a TickerGrove forecast of the next FOMC vote.

What to watch

The July minutes already listed the next scheduled FOMC meeting as September 15, 2026 through September 16, 2026. These remarks do not re-vote the funds-rate range and do not print a path for that meeting. If delivery later diverges from this prepared text, that is a later delta. Secondary wraps are not the number of record.