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2w ago

Warsh’s Jackson Hole Debut Becomes Market Test for Rising Long-Term Yields

Markets are watching the Aug. 28 speech for clues on how the Fed will respond to higher long-term Treasury yields and recent Treasury debt-management steps.

The Federal Reserve building is set against a blue sky in Washington, U.S., May 1, 2020. REUTERS/Kevin Lamarque/File Photo
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U.S. Federal Reserve Chairman Kevin Warsh holds a press conference following a two-day meeting of the Federal Open Market Committee (FOMC), as the Federal Reserve holds interest rates steady, at the Federal Reserve, in Washington, D.C., U.S. July 29, 2026. REUTERS/Evelyn Hockstein/File Photo
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Overview

  • Federal Reserve Chair Kevin Warsh is scheduled to deliver his first Jackson Hole keynote on Friday, Aug. 28 at 10 a.m. ET and traders expect the speech to signal how he will judge inflation and financial stress.
  • Investors want a clear 'reaction function' because long-dated U.S. Treasury yields have jumped with the 30-year reaching levels not seen since 2007 and the Treasury announced plans to expand long-dated buybacks.
  • Warsh has shifted the Fed toward less explicit forward guidance and said he will await recommendations from five internal task forces before detailing policy rules.
  • Crypto markets have already reacted to recent macro moves: heavy spot Bitcoin ETF inflows, scarce available supply and the Treasury buyback announcement helped trigger rapid short-covering that pushed Bitcoin up about 22% into the high $70,000s and into the $80,000s on some intraday prints.
  • The speech is a live test for market stability because a vague or noncommittal tone could deepen Treasury volatility, strengthen the dollar, and squeeze liquidity-sensitive assets while clearer guidance could calm rates ahead of the Sept. 15–16 FOMC decision.