Federal Reserve Chair Kevin Warsh is set to speak Friday, August 28, with investors looking for clearer signals on inflation and the path of interest rates.
Federal Reserve Chair Kevin Warsh is scheduled to deliver his first major Jackson Hole address on Friday, August 28, a closely watched moment for investors seeking a firmer sense of how the central bank will respond to inflation that remains above its 2% target.
Warsh has offered broad commitments to bring inflation down, but few specifics on the near-term policy path. In remarks after the Fed’s July meeting, he said he was still deciding whether the Jackson Hole speech would take a wide-angle view of the economy or address the policy choices facing the Fed through the rest of the year.
That uncertainty has raised the importance of the annual Wyoming symposium, where Fed chairs have often used keynote speeches to explain their economic thinking to markets and the public. Investors are particularly focused on whether Warsh will signal a greater willingness to raise rates if inflation does not ease further.
Reuters reported that markets were pricing roughly a one-in-three chance of a rate increase at the Fed’s mid-September meeting. NPR reported that economists expect Warsh may instead keep the speech focused on longer-run questions, including productivity, demographics and the economic effects of artificial intelligence.
The immediate backdrop is complicated. Warsh has argued that AI could eventually lift productivity and curb price pressures, while economists cited by NPR said the buildout is also adding to some costs in the short run, including demand for construction labor and computer memory chips.
Financial markets were already attuned to the speech: Reuters reported that gold edged higher Thursday as traders awaited Warsh’s comments. The address will be streamed by the Federal Reserve Bank of Kansas City at 10 a.m. Eastern time Friday.
