Warsh Faces D-Day at Jackson Hole
Federal Reserve Chair Kevin Warsh is set to face a crucial test at this week's Jackson Hole symposium as he prepares for his first major speech since taking over.
Warsh has adopted a strategy of 'plausible deniability' in his communication, refusing to rule out decisions or provide clear guidance on interest rates and inflation.
This approach has been met with criticism from investors who feel it is contributing to market uncertainty and volatility, particularly in the $50 trillion US government bond market.
Natixis Investment Management's Jack Janasiewicz says Warsh has a chance to provide clarity and re-establish confidence in his leadership with a more detailed explanation of his ideas.
The Treasury Department's decision to double its buyback program of long-dated bonds has added complexity to the situation, leaving investors uncertain about the Fed's reaction function.