Warsh's Jackson Hole Warning Slams Equities as Markets Track Rates and Commodities

Kevin Warsh's address at the Jackson Hole conference had an immediate impact on markets, triggering a sell-off in US equities on Friday. Despite ending the week higher overall, the event was enough to weigh down the market.

The sell-off was partly due to Warsh's reiteration of the Federal Reserve's commitment to keeping inflation at 2%. He also warned that persistent inflation could lead to a rate rise, contradicting recent Treasury Department actions aimed at keeping yields low.

Not all markets were affected equally, however. The Nasdaq outperformed after Nvidia's earnings supported the AI theme, while European indices were mixed. In Asia-Pacific, several key indices, including the Shanghai Composite and Japan's Nikkei, posted gains.

The precious metals market saw prices near their lows at week's end, as did Treasuries. However, a bullish divergence between 10-year T-Notes and 30-year T-Bonds remained intact. The crypto market was flat after last week's advance, while crude oil finished lower but off its lows.