Federal Reserve Chair Kevin Warsh said Friday that inflation remains too high and suggested the central bank may need to raise interest rates in the coming months, his clearest signal yet on where policy is heading.

Speaking at the Kansas City Fed's annual economic symposium in Jackson Hole, Wyoming, Warsh acknowledged that summer price readings came in better than expected but said they did not persuade him that underlying trends had meaningfully improved, the Associated Press reported. He repeated that the 2% inflation target is fixed, and said that if policymakers cannot be confident inflation is easing, the Fed has work to do.

It was Warsh's first appearance at the symposium as chair. He became the 17th head of the Federal Reserve on May 22, succeeding Jerome Powell, and has presided over two policy meetings, leaving the benchmark rate unchanged at both in a range of 3.50% to 3.75%.

Warsh used much of the speech to set out a philosophy of policymaking rather than a forecast, CNBC reported. He said he was committed to a discipline rather than to a decision, and argued that investors should not treat the central bank as the main input for their next trade. He described the broader economy as having strengthened, citing gains from artificial intelligence and resilient business and consumer spending, and attributed slower hiring to a flattening labor supply.

Reporting from Jackson Hole, The Washington Post wrote that Warsh said he was impressed by the economy's overall strength while remaining concerned about the direction of underlying inflation, and that he stopped well short of signaling an increase at the Fed's next meeting.

The speech landed in a tense market. The Fed's preferred inflation gauge showed prices rising 3.7% over the past year, while the economy shed 23,000 jobs, according to The Hill. The 30-year Treasury yield touched a 19-year high in recent weeks before easing after Treasury Secretary Scott Bessent announced plans to expand the government's long-term debt buyback program starting Sept. 9.

Stocks held steady after the remarks, though bond traders increased their bets on a rate increase, the Associated Press reported.

This year's symposium was built around financial innovation and its implications for payments and policy. Warsh has also created five internal task forces to review Fed communications, balance sheet policy, data, productivity and jobs, and the inflation framework.