Following Federal Reserve Chair Warsh's recent remarks at the Jackson Hole Economic Policy Symposium, Barclays has adjusted its expectations for US monetary policy.

In his Friday speech, Chair Warsh asserted that US inflation remains excessively high, underscoring that price stability continues to be the Fed's primary objective. He cautioned that without greater confidence in inflation moving back to the 2% target, "there is a lot of work to be done."

Reacting to these hawkish comments, Barclays now anticipates a 25-basis-point rate increase at the September meeting, followed by another hike in December. The bank notes that Warsh's address was distinctly hawkish, and even though the Fed has moved away from explicit forward guidance, the message clearly indicates that further monetary tightening is necessary.

While Barclays still expects monthly inflation figures to come in softer than the long-term indicators highlighted by Warsh, it warns that unfavorable base effects will likely impede progress on these measures before the year concludes.