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FedWatch Lifts September Hike Odds After Warsh Remarks

8/30/2026

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Summary

Story summary

Fed Chair Kevin Warsh delivered his first Jackson Hole keynote, saying inflation may require rate hikes.
He noted the personal consumption expenditures price index was 3.7% YoY in July, above the 2% goal.
Two-year Treasury yields rose to roughly 4.3% after his remarks.
CME FedWatch lifted the probability of a September rate hike above 50%.

History

Historical Context

When President Carter appointed Paul Volcker as Fed chair in August 1979, he soon lifted the federal funds rate to a 20% peak in June 1981, driving inflation from a 14.8% March 1980 high to below 3% by 1983. Today, Fed Governor Kevin Warsh cites that same “Volcker shock” while warning that July’s 3.7% PCE and 4.3% two-year yields may justify another hike.

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Story summary

Fed Chair Kevin Warsh delivered his first Jackson Hole keynote, saying inflation may require rate hikes.
He noted the personal consumption expenditures price index was 3.7% YoY in July, above the 2% goal.
Two-year Treasury yields rose to roughly 4.3% after his remarks.
CME FedWatch lifted the probability of a September rate hike above 50%.

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