Fed Hawks Up Interest Rates as Nvidia Soars on Blowout Earnings
The Federal Reserve has delivered its most aggressive interest rate message in months, according to Fed Chair Kevin Warsh. In his Jackson Hole keynote address on August 29, 2026, Warsh emphasized that the central bank is responsible for sustained, elevated inflation, which has been above the 2% target for 65 months.
Warsh stated that the core Personal Consumption Expenditure (PCE) price index, the Fed's preferred inflation gauge, is tracking at 3.7% over the past 12 months and 4.1% over the past six months. He also noted that credit spreads are near historic tights and bank lending standards are easy.
The Fed Chair's hawkish tone led to a repricing of interest rate markets, with odds of a September Fed interest rate hike jumping to 57.5%, up from 39.9% one week ago and 24% one month ago. The 2-year Treasury yields pushed above 4.30%, and the dollar rebounded.
On the other hand, Nvidia shares soared on Thursday, closing 8.74% higher after reporting a blowout Q2 fiscal year revenue of $96.2 billion, up 106% year-over-year. The company guided for 70% revenue growth in fiscal-year 2028, smashing estimates.