Warsh Reaffirms Inflation Fight, US Stocks Fall
US stocks closed lower on August 28 after Federal Reserve Chair Kevin Warsh reiterated the central bank's focus on fighting inflation, increasing prospects for a rate hike. In his first Jackson Hole speech, Warsh said that without confidence in inflation heading clearly and quickly towards the Fed's 2% goal, there would be 'more work to do'. Traders added bets on a September rate hike after Warsh stated that recent inflation data did not suggest a change in trend.
'Why the market is modestly reacting is he (Warsh) is very adamant that the 2% inflation target is going to remain,' said Mark Hackett, chief market strategist for Nationwide. 'He's reiterating hawkishness, but in a more consistent way than an incremental way.'
The S&P 500 lost 19.23 points, or 0.25%, to close at 7,711.76, while the Nasdaq Composite fell 138.93 points, or 0.52%, to 26,402.42. The Dow Jones Industrial Average closed 9.45 points lower at 53,559.99.