Following Federal Reserve Chair Warsh's hawkish remarks at the Jackson Hole Economic Policy Symposium last Friday, Barclays has updated its monetary policy outlook, now anticipating a 25-basis-point interest rate increase in September, with an additional hike expected in December.

During his address, Chair Warsh underscored that U.S. inflation remains excessively high, signaling that price stability continues to be the Fed's top priority. He cautioned that if confidence in inflation returning to the 2% target is lacking, the central bank will face "a lot of work ahead."

Barclays characterized Warsh's speech as notably hawkish, noting that while the Federal Reserve has ceased providing explicit forward guidance, the tone still strongly suggests that further tightening of monetary policy will be necessary.

The bank also indicated that although it continues to project monthly inflation data to come in considerably more moderate than the longer-term metrics emphasized by Warsh, unfavorable base effects are expected to impede progress on these indicators through the remainder of the year.