Overview
- Speaking at Jackson Hole, Warsh said underlying inflation has not meaningfully improved and warned the Fed is prepared to do more to bring prices down.
- He explicitly rejected routine forward guidance and declined to spell out specific conditions that would prompt a rate move, saying he favors discipline over a promised path.
- Traders reacted by raising the odds of an additional Fed rate increase and selling stocks as two-year Treasury yields rose sharply.
- Recent data show core PCE inflation remains well above the Fed's 2% goal at about 3.3%, and the Fed's internal reviews and five task forces could change future communication and operations.
- Attention now turns to upcoming economic reports and the Fed's Sept. 15–16 meeting, which markets view as the next decisive moment for policy action and for how higher borrowing costs may affect households and businesses.