Fed Chairman Kevin Warsh said at the Jackson Hole economic symposium that the Federal Reserve may need to raise interest rates if inflation does not move toward its 2% target. Markets see about a 60% chance of a September hike, up from 40% before his remarks. Inflation, measured by the personal consumption expenditures price index, stayed at 3.7% annually in July, while the labor market remains stable and the policy rate has been unchanged at 3.50% to 3.75% since December. Warsh said confidence that underlying inflation is declining to 2% is required before any policy action; without that confidence the Fed must act. He noted that short‑term rates are the primary tool to achieve the dual mandate and said the recommendations of five task forces studying longer‑term issues will not affect current decisions. Three Fed officials dissented at the July meeting over keeping the rate unchanged. Rate futures indicate a 60% probability of a hike next month, compared with 40% prior to the speech. Warsh did not give a timeline and said his comments are not forward guidance. Upcoming August data on employment and inflation will be released early next month and will influence the Fed’s next move.