Kevin Warsh will deliver his first keynote address as Federal Reserve chair on Friday at the Jackson Hole Economic Policy Symposium in Wyoming, a speech investors are watching closely for signals on how he intends to handle inflation still running above the Fed's target.
How Warsh got here
Warsh was confirmed by the Senate on May 13 in a 54-45 vote described as the most divisive confirmation in Federal Reserve history, and was sworn in as the central bank's 17th chair on May 22 at a White House ceremony, with Supreme Court Justice Clarence Thomas administering the oath. His public statements since taking office have pointed toward tighter inflation discipline and more streamlined Fed communication.
What's at stake Friday
The Fed's preferred inflation gauge, the PCE price index, rose an estimated 3.6% annually in July, its smallest increase in four months but still well above the central bank's 2% target, while long-term Treasury yields have climbed to two-decade highs on sticky inflation and fiscal deficit concerns. Markets are pricing in roughly one-in-three odds of a September rate hike, and analysts say Warsh's roughly 20 minutes at the podium, with this year's symposium theme set as "Financial Innovation: Implications for Payments and Policy," could be a tiebreaker for the direction of policy in the months ahead. Some economists caution he may focus more on describing his broader framework for Fed reforms than offering explicit guidance on rates; investors read his comments after the Fed's July meeting as showing insufficient commitment to bringing inflation back to target.
Around 120 central bankers, policymakers and economists from more than 70 countries are expected to attend the symposium, which runs from August 27 to 29.
