Fed Chair Warsh says US jobs market remains strong, flags inflation concerns at Jackson Hole

US Federal Reserve Chair Kevin Warsh said the American labour market remains resilient, with the current unemployment rate broadly consistent with full employment, while warning that inflation continues to be a concern for policymakers.

Speaking at the Federal Reserve Bank of Kansas City’s annual Jackson Hole symposium on Friday, Warsh said the US economy was performing well on the employment side of the central bank’s dual mandate. The unemployment rate currently stands at 4.1%, which he said is broadly in line with conditions associated with full employment.

However, Warsh struck a more cautious tone on inflation, noting that price pressures remain elevated. According to prepared remarks, he said the inflation data were “more concerning” and added that he would be “hard pressed” to describe current financial conditions as restrictive.

The Fed chair’s comments are likely to reinforce expectations that the US monetary policy regulator will remain vigilant on inflation even as the labour market shows signs of stability.

Warsh also highlighted the growing influence of artificial intelligence on the economy, describing the current period as “a hinge point in history”. He said AI has the potential to reshape productivity, economic growth and the nature of work in the years ahead.

The Fed has intensified its study of the technology’s economic impact through a dedicated task force established after Warsh assumed office earlier this year. The group is examining how AI could affect productivity gains, employment trends and broader economic activity.

The Jackson Hole symposium is one of the most closely watched gatherings of central bankers, economists and financial market participants, with policymakers often using the platform to signal shifts in economic thinking and monetary policy priorities.