Warsh's Hawkish Warning Sinks Stocks as Dollar Surges

US Federal Reserve chief Kevin Warsh sent Wall Street stocks lower on Friday after he delivered a hawkish speech at the Jackson Hole symposium.

In his highly anticipated address, Warsh emphasized the need to fight high inflation, which has nearly doubled the Fed's target of 2% in the world's largest economy.

'We must be confident that underlying inflation is moving to our objective, clearly and at sufficient speed. Otherwise, we have work to do,' Warsh said.

Short-term US Treasury bonds saw yields spike in anticipation of a higher Fed rate after the speech, while futures markets raised the odds of a rate hike in September.

The dollar rallied against major currencies, including the euro and pound, as investors worried about high energy prices from the Iran war persisting into winter.