Federal Reserve Chairman Kevin Warsh reaffirmed the central bank's commitment to lowering consumer prices, acknowledging that inflation remains too high in a highly anticipated speech in Jackson Hole, Wyoming.

During remarks at the Fed's annual conference, Warsh said that recent government data shows inflation has cooled, but "they do not tell me that underlying trends have meaningfully improved."

While stopping short of explicitly saying the Fed could raise its benchmark interest rate, Warsh also signaled that policymakers are prepared to act if inflationary pressures don't subside. Inflation has eased in recent months after reaching a 3 -year high in May, but prices remain stubbornly above the Fed's 2% annual target.

"We must be confident that underlying inflation is moving to our objective clearly and at sufficient speed," Warsh said. "Otherwise, we have work to do."

Analysts interpreted his comments to indicate that the Fed may raise interest rates later this year if price pressures persist.

"Fed Chair Kevin Warsh opened the door to a Fed rate hike," Heather Long, chief economist at Navy Federal Credit Union, said in an email. "A hike probably won't come in September, but it will by October or December."

Although inflation remains hot, Warsh said he is "impressed by the overall performance of the economy," touting measures such as the nation's unemployment rate, which sat at 4.1% in July.

Investors want guidance Warsh doesn't want to give
Economists and Wall Street analysts have looked for a clear signal from Warsh on how he thinks the Fed should respond to stubborn inflation. The Fed chair, who succeeded Jerome Powell, has been significantly more tight-lipped than his predecessors.

During the speech on Friday, Warsh again made the case for limiting forward guidance on future Fed policy decisions, which he has argued limits the central bank's flexibility by committing it to a specific policy path.

"Forward guidance as a regular practice was adopted by my colleagues and me during the Global Financial Crisis," he said. "It was essential at the time, and we introduced it with much fanfare. But, as with other legacies of crises past, I believe that the practice has overstayed its welcome."

Warsh has been less interested in telling markets what the Fed will do and more interested in explaining how the Fed reacts to changing conditions, Jasmine Yu, chief investment officer at Bryn Mawr Trust, told CBS News in an interview on Thursday.

While Warsh has sidestepped questions about the trajectory of interest rates, several Fed officials have underscored their openness to a rate hike. On Friday, CME Group's FedWatch tool showed a 55% likelihood that the Fed would raise rates at its Sept. 15-16 meeting.

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