Kevin Warsh is the new head of the US central bank Fed. He gives an important speech on Friday. The place is Jackson Hole in the state of Wyoming. Warsh talks about inflation in the USA.
Inflation means: Money loses value. Everything becomes more expensive. The rate is 3,7 percent in the USA. This is very high. The Fed wants a rate of 2 percent.
Warsh says: Prices still rise too much. He sees no fast help. Therefore he plans new steps. The Fed can raise interest rates. Higher interest rates stop inflation.
President Donald Trump wants lower interest rates. But a war in Iran makes energy very expensive. This pushes prices up. Many experts at the Fed now demand higher interest rates.
The speech brings tension to the markets. Stock prices move up and down. The DAX in Germany reaches a new high. The next decision on interest rates is in mid-September.
