JACKSON HOLE: WARSH OPENS THE DOOR TO RATE HIKES
Inflation is the No. 1 priority: PCE remains at 3.7%, still well above the 2% target. Warsh wants to see inflation fall clearly and quickly enough before the Fed can feel comfortable. The U.S. economy remains strong: growth is stable and the labor market is close to full employment → the Fed has no reason to rush into easing.
Possibility of another rate hike: Warsh stressed that short-term interest rates remain the Fed’s primary tool if price pressures fail to improve.
Markets reacted immediately:
Probability of a September rate hike: ~58%USD surgedGold fell more than 3% BTC/Crypto: could remain under pressure if the USD and yields continue to rise.“Higher for longer” is not over — the Fed may even need to raise rates again.
@BackcomGlobal
