Speaking at the Jackson Hole symposium in Wyoming, Warsh put inflation control at the centre of his message. It was his first major address since becoming chairman in May. He said the Federal Reserve still needed to act to bring price pressures under control.

Warsh rejected suggestions that the central bank could soften its inflation objective. Some recent figures had offered encouragement, but he said the broader price trend remained unsatisfactory. Interest rates would remain the Fed’s main instrument for restoring price stability.

Investors responded by pushing the two-year US Treasury yield up to 4.32%. Traders’ estimated likelihood of a September rate increase climbed from 36% before the address to more than 50% afterwards. That shift reflects market expectations, not an announced Fed decision.

Warsh also explained his reluctance to provide advance signals about future policy decisions. Given economic uncertainty, he wants investors to assess incoming data themselves. The next US consumer inflation release is due on September 11, ahead of the Fed’s September 15-16 meeting.

For India, a US rate increase could strengthen the dollar, weaken the rupee and raise the cost of imports such as oil. It could also put pressure on the RBI to maintain elevated rates as investors weigh returns in India against those available in the US.