Warsh Keeps His Cards Close to Vest at Jackson Hole
New Federal Reserve Chair Kevin Warsh has been critical of the Fed's reliance on guidance in the past. In his first speech at the Jackson Hole Economic Policy Symposium, he provided no forward guidance on interest rates and hinted at no rate hike direction.
Inflation is still running significantly hotter than the 2% target, and many voting members of the policy-making Federal Open Markets Committee are leaning toward a rate hike before the end of 2026. Despite this, Warsh's silence has sparked debate among investors about whether the Fed will hold rates steady or raise them in September.
Markets are pricing in a 57% chance of a quarter-point rate hike, according to the CME FedWatch tool. This uncertainty is significant because the FOMC decision on September 16 could move the stock market significantly one way or the other.