Markets Stuck in Fog as Fed Policy Remains Mysterious

The Federal Reserve's interest rate policy has markets confused, and this is precisely what Fed Chair Kevin Warsh wants.

Consumer confidence fell in August despite expectations of a rise, while new home sales dropped 10.5% in July, the worst performance since January.

The uncertainty surrounding Fed policy has led to no clear direction for interest rates through 2027, with even the September outcome carrying better than even odds.

Fed Chair Warsh rejects forward guidance, which is why his first Jackson Hole address is an unusual kind of event risk. He seems to prefer keeping markets guessing.