The annual Jackson Hole Economic Policy Symposium draws in all the nerds from around the world. From heads of state and central bankers to captains of industry and high-level quantitative analysts. This morning new Fed Chair Kevin Warsh made his debut keynote, and all the world was listening for hints of the direction that the Federal Open Market Committee plans to sway interest rates and the timing of any moves.
Mr. Warsh downplayed some of the recent disinflationary data and reiterated that the new Sheriff is still shooting to lower inflation. Until he is satisfied that inflation is gunning for the 2.0% level, the Fed has more work to do. A “talk softly and carry a big stick” kind of guy, Kevin didn’t say what that work entails, but since his speech, the likelihood of a Fed rate hike at next month’s meeting increased from 35% to 48%. And if it doesn’t happen in September, there’s 100% chance of a rate hike by the end of the year.
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