28.08.2026 - Jackson Hole - Warsh in the Spotlight

All eyes will be on Kevin Warsh later today, when he delivers his first major speech since becoming Federal Reserve Chairman at the annual Jackson Hole symposium.

Markets will focus on whether Warsh adopts a hawkish tone on inflation and provides any guidance on the future path of interest rates. Investors will also watch for comments on the recent stress in the Treasury market and Treasury Secretary Scott Bessent’s interventions.

Expectations for clear guidance remain low.

Nevertheless, with inflation rising again, Treasury yields elevated and consumer weakness becoming more visible, his tone alone could move markets.

Markets: wait and see

• Equities: European stocks higher while US falls after yesterday’s move

• Bonds: yields moving higher - US 10y yield back at 4.69%, Japan 10y yield 2.93%

• Commodities: Oil prices stable, WTI around USD 83/barrel and Brent around USD 88/barrel
  Precious metals prices higher, gold at USD 4’610/oz, silver moves above USD 70/oz

• Currencies: US dollar almost unchanged Japanese Yen falls again, USDJPY 160

• Cryptos: lower after recent rally - Bitcoin back below USD 80k after a quick move above USD 81k

• Volatility: The VIX index remains at low levels falling below 15 (still good opportunity for hedging)
  

My View: A hawkish Warsh could put short-term pressure on risk assets.

Gold and silver could face a short-term setback, although my medium- to long-term constructive view on precious metals remains unchanged. The recent crypto rally could also lose momentum.

A stronger focus on inflation could push bond yields higher again, potentially offsetting the impact of Bessent’s recent interventions.

The Fed faces a difficult combination: inflation remains too high, while higher costs increasingly pressure consumers and an economy already carrying historically high levels of debt.

Cutting rates risks fueling inflation, while staying restrictive increases pressure on consumers, growth and debt refinancing costs.

My view remains unchanged: the Fed is still behind the curve. Therefore, anything other than a hawkish tone from Warsh would come as a surprise to me.

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