Warsh's Jackson Hole Speech Expected to Focus on Structural Themes

TD Securities strategists believe that Kevin Warsh's upcoming speech at Jackson Hole will focus on structural themes, including productivity, AI-driven growth, and potential changes to the Federal Reserve's regime.

As a result, they expect rate expectations to remain relatively anchored, limiting the scope for significant directional movement in the US Dollar (USD).

The strategists argue that any hawkish clarification on inflation credibility may provide only limited USD support, while failure to address concerns around the credibility of the Fed's inflation-targeting framework could weigh more heavily on the dollar.