Chair Warsh said inflation is the problem and rate hikes are the tool to fix it. Still, he is not a traditional Chair and likely didn't intend it as guidance. Our straight-up read of the Chair's speech is decidedly hawkish. Following the July press conference, financial markets were left with more questions than answers.We expect the August CPI print to provide further evidence of disinflation. We think it will be enough to keep the Fed on hold, but it is a closer call now.Our FX strategists expect cooling US inflation, a patient Fed, and a renewed policy-related discount to weigh on USD particularly versus AUD.Warsh affirmed the 2%-numerical target for inflation. In July he implied that he had a broader definition of price stability and that he was not inclined to reveal this alternative measure to financial markets. This raised concerns in some corners of the market that the inflation target may be a soft target or would altogether be dropped in favor of a more opaque target. Today, Warsh laid out a set of "key principles" that will guide monetary policy.While we see a dear shift in communication from the Chair, reverting back to June's hawkish tone and away from July’s lack of message, we see reasons to maintain our view of a Fed on hold.