Fed Has 'Work to Do' if Price Rises Don't Ease for Americans

The Fed's predominant focus right now should be on prices.

Interest rate hikes are a tool used by central banks aiming to slow the pace prices are rising in the shops. By pushing up the cost of borrowing for things such as mortgages, loans and credit cards, central bankers hope consumers will spend less and the rate of price increases will slow.

Higher interest rates, however, can lead to better returns for savers.

The spike in interest payments has driven US national debt past the $40tn (£29. 5tn). The figure has doubled in a decade under both the Trump and Joe Biden administrations.

Treasury Secretary Scott Bessent said the government would buy back more debt in a bid to lower borrowing costs, but the market's reaction to the announcement proved short lived.

The Fed's next interest rate decision will be made on 15-16 September.

The reactions to any decision made by US President Donald Trump will be closely watched, with the mid-term elections looming and voters concerned about affordability.

Trump, who appointed Warsh in May, repeatedly criticised and pushed his predecessor Jerome Powell to cut interest rates. The president has previously said rate hikes 'just keeps the country down. 'Warsh issued a plea in his speech to not label his remark as 'forward guidance' and said he believed the practice of sending signals to the markets on future interest rate decisions, adopted in