In a highly anticipated speech at the Jackson Hole Economic Symposium in Wyoming on Friday, Federal Reserve Chair Kevin Warsh said inflation remains higher than the central bank’s longstanding goal of 2% and suggested the central bank may need to raise interest rates in the coming months.

“We must be confident that underlying inflation is moving to our objective clearly and at sufficient speed,” Warsh said during the annual gathering of global banking leaders and finance ministers.

Warsh said he is impressed by the overall performance of the U.S. economy, citing the strength of capital business investments and a 20% growth in profits over the past year among businesses in the S&P 500 stock index.

He said the Fed is carefully watching the change in business earnings growth rates, as well as asset prices, business confidence, consumer incomes and consumer spending — the latter of which he described as “healthy,” having increased more than 2% over the past year.

He described labor markets as “quite stable” with a historically low unemployment rate of 4.1%.

“But on the price stability side of our mandate, the numbers are more concerning,” he said.

The Federal Reserve, which is congressionally required to maximize employment while keeping prices stable, says a 2% inflation rate is most consistent with its price-stability mandate.

The Personal Consumer Expenditures index, which measures the average increase in prices for all domestic personal consumption in the U.S., currently stands at 3.7% and “comparable measures from the Consumer Price Index are also elevated,” Warsh said, adding: “The Fed’s predominant focus right now should be on prices.”

The trick, he said, is determining whether underlying inflation is rising, falling or stuck somewhere in between — and how quickly.

The CPE and CPI readings, he said, “do not tell me that underlying trends have meaningfully improved.”

Warsh said he likes to consider individual components of the 199 aspects of the CPE. Over the last 12 months, he said 54% of goods and services in the index showed price increases above 3%. Over the last six months, 49% did.

“This is well below the post-pandemic highs, but still elevated. Quite elevated,” he said.

Inflation expectations in the medium-term look “stable” and “very well anchored,” he said, “but they must be closely minded, and it’s the Fed’s job to make sure that inflation expectations do not get unanchored.”

Inflation has been above the Fed’s 2% target for 65 straight months. Warsh said the Fed is solely, and rightly, responsible.

President Donald Trump, who appointed Warsh, continues to call for lower interest rates, saying current rates are artificially high and hurting businesses and consumers. But economists say lower interest rates tend to increase inflation over time.

Warsh said Friday that failing to keep inflation under control could have negative consequences for everyday Americans.

“The most serious harm is likely to befall those without any financial assets if the Fed gets inflation wrong and judges the economy wrong … not the financial highflyers,” he said. “Hard-working Americans are the ones left to deal with inflation that’s too high or jobs that suddenly appear less secure.”

During his speech, the University of Michigan Surveys of Consumers released its final figures for August that showed consumer sentiment fell 6% compared with July and is now 11% lower than a year ago. Driven by worries that inflation will remain high into the future, the sentiment declines were across all political groups but fell most amongst among Republicans, older consumers, lower- and middle-income consumers and those without a college degree.

In July, the Federal Open Market Committee left the benchmark interest rate unchanged at 3.5% to 3.75%.

The Fed’s next interest rate meeting is scheduled for Sept. 16. The CME Group FedWatch Tool puts the odds of a September interest rate hike at 57.5%.