Warsh Faces Market Pressure as Fed Hopes for Clarity on Rate Policy

Investors are eagerly awaiting the annual Jackson Hole symposium for clues on how U.S. Federal Reserve Chairman Kevin Warsh plans to navigate a landscape where higher Treasury yields could do some of the tightening work.

The central bank often uses this gathering, hosted by the U.S. Federal Reserve Bank of Kansas City, to flag its expectations for rate policy.

However, few investors expect Warsh to follow tradition in his debut speech on Friday, as he has abandoned forward guidance and instead suggests that traders and portfolio managers should scrutinize market signals.

This shift has left the market in the dark, and investors hope that Warsh will use his speech to fully explain his roadmap for returning inflation to the Fed's 2 per cent target and what he sees as the bond market's role in that strategy.