Kevin Warsh Just Rattled Markets At Jackson Hole

Federal Reserve Chairman Kevin Warsh delivered his first Jackson Hole keynote on Friday, August 28, and markets read it as decisively hawkish. Warsh said PCE inflation is running at 3.7% year-over-year and 4.1% annualized over the past six months, described the labor market as consistent with full employment at 4.1% unemployment, and said he would be "hard pressed to describe broad financial conditions as restrictive." He set the bar plainly: "We must be confident that underlying inflation is moving to our objective, clearly and at sufficient speed. Otherwise, we have work to do." Within minutes, Polymarket odds of a 2026 rate hike jumped to as high as 69% from the mid-50s Thursday. CME futures put September hike probability at 59%, up from 35% the day before. The two-year Treasury yield rose as much as 9 basis points to 4.32%, the U.S. dollar gained 0.4%, and gold sold off more than 2%. Priya Misra of JPMorgan Asset Management called the remarks a "hawkish speech" and a "clean-up act" after the July FOMC meeting. Aberdeen's Matthew Amis told the Financial Times the speech "sets up a September meeting where if they don't hike, credibility will take another bashing." Warsh stopped short of explicitly endorsing a hike and joked that his remarks were a "trail map, just don't call it forward guidance." Markets called it forward guidance anyway. Video contains content from CNBC. #KevinWarsh #JacksonHole #FederalReserve 🌐 Find more market-moving insights at https://www.benzinga.com — your one-stop destination for the latest financial news, data, and expert analysis to stay ahead of the markets. 🖥️ Want the same tools the pros use—without the $10K Bloomberg terminal? Benzinga Edge gives you real-time portfolio alerts, weekly stock picks, and pro-grade research in one command center. 👉 https://bit.ly/4unSKiB ------------------------------------------------------------------------------------ 📲 Follow us on socials @benzinga 🔔 Subscribe To The Channel: https://www.youtube.com/@Benzinga ------------------------------------------------------------------------------------ ⚠️ Disclaimer: Investing in financial markets carries risk, and there are no guaranteed returns. All information is for educational purposes only and should not be taken as financial advice. Always do your own research and speak with a qualified financial advisor before making investment decisions. Only invest what you can afford to lose. Past performance does not guarantee future outcomes.