The head of the US Federal Reserve confirms that inflation is still very high and does not support a rapid return to the 2% target.

US Federal Reserve Chairman Kevin Warsh said that inflation is still too high for the central bank to consider that its path toward its 2 percent target is proceeding at the required speed, stressing at the same time that the US economy remains flexible and the labor market is in good shape.

Warsh explained, during his press conference following the Fed’s decision to raise interest rates by a quarter of a percentage point to a range of 3.75-4 percent, that “inflation is very high, and it has always been so,” noting that the summer data did not provide evidence of an improvement in the inflation situation.

He added that the Fed must be confident that core inflation is moving towards the 2 percent level “at the appropriate time,” and that the Open Market Committee concluded that this condition has not yet been achieved.

On the other hand, Warsh described the US economy as “resilient,” pointing to the strength of credit flows and the improvement of a number of economic indicators in recent months. He said that the economy “seems to be getting stronger” at the time when the Federal Reserve made its decision to raise interest rates.

Regarding the labor market, Warsh said that the unemployment rate is still low, while job vacancies and working hours are increasing, adding that the labor market aspect, within the federal mandate, is “in a good position.”

Regarding financial conditions, Warsh said that “it is difficult for him to consider financial conditions restrictive,” noting that this opinion was widely shared within the Open Market Committee. He added that credit flows remained strong.

Warsh said that the risks associated with inflation tend to the upside, while the labor market risks appear balanced, stressing that “the Federal Reserve’s primary focus is on price stability.”

He pointed out that the committee’s decision removed “a degree of easing” from monetary policy, after the committee had expressed in July a joint willingness to act.

Warsh revealed that he did not present an individual prediction of the path of interest rates within what is known as the “dot chart” at the September meeting, at a time when the new expectations of policymakers showed that the majority of committee members expect another interest increase before the end of the year.

He said that there are a “very large number” of price categories that record increases exceeding 3 percent on a six- and 12-month basis, considering that this does not yet support a rapid and sustainable return of inflation to the “Federal” target of 2 percent.