Warsh says several categories of prices are still rising above 3 per cent

Fed Chair Kevin Warsh says price increases above 3 per cent cover several categories of goods and services. He says the labour market is in good shape and the Fed's main focus remains price stability.

Fed Chair Kevin Warsh said multiple categories of goods and services have shown price increases above 3 per cent over both six-month and 12-month periods. He said the Federal Reserve's predominant focus remains price stability rather than the labour market.

Warsh said the labour market side of the Fed's mandate is in good shape. He pointed to a low jobless rate, along with rising job openings and working hours.

The remarks echo what Warsh said earlier this year, when he called inflation too high for too long and said summer data showed little improvement.

The comments come after the Fed raised its benchmark rate by 25 basis points to a range of 3.75 per cent to 4 per cent. The decision passed 12-0. Fed officials' own projections show 12 members expecting rates at 4.1 per cent by the end of 2026, four expecting 4.4 per cent and two expecting 3.9 per cent. The long-run neutral rate was revised up to 3.25 per cent.

Traders had priced in a 95 per cent chance of that hike before it happened. They are now betting on one more increase this year, in line with the Fed's median projection.

Deutsche Bank's Matthew Luzzetti has said the Fed's patience has run out and that he expects a quicker return to its 2 per cent target.