Warsh Faces Hawkish Pressure at Jackson Hole

Kevin Warsh will deliver his first speech as Fed Chair at Jackson Hole's annual symposium in Wyoming on August 28. The event takes place less than three weeks before the September 16 FOMC decision, and Wall Street is eager to see if he'll try to calm down the hawks who are pushing for a rate hike.

The backdrop Warsh faces is challenging. The 30-year UST yield has reached its highest level since 2007, despite June and July CPI cooling significantly. Core inflation dropped to 2.5%, its lowest point since 2021, while growth is slowing and the labor market posted a negative payroll print in recent months.

Walmart's warning that consumers are pulling back has also added to the uncertainty. Yet, several FOMC members continue to advocate for a rate hike, with futures markets oscillating between 35% and 65% odds of a September increase.