Warsh's Hawkish Remarks Spark 20% Jump in Odds for September Rate Hike

The US Dollar Index (DXY) rallied on Friday, gaining 0.36% to trade around 99.50, as Federal Reserve Chair Kevin Warsh emphasized the need to restore price stability during his Jackson Hole speech.

Warsh's hawkish remarks prompted investors to sharply reassess the outlook for US interest rates, with markets now assigning a 56% chance to an interest-rate hike at the Fed's September meeting, up from roughly 36% before Warsh's speech.

The combination of resilient economic activity and persistent inflation concerns triggered this significant repricing of monetary policy expectations.