The Fed’s New Focus: Prices Over Jobs | S3 E163 | 08-28-26
Federal Reserve Chairman Warsh delivered a notably hawkish speech at this year’s Jackson Hole Economic Symposium, and it has real implications for where interest rates go next. Hear what he said about inflation, the labor market, and why the Fed isn’t backing off even after a few better-than-expected readings this summer.
Inflation has stayed above the Fed’s 2% target for more than five years, and Warsh made clear that “better than expected” doesn’t mean “good enough.” With more than half of the PCE basket still growing above 3%, and financial conditions loose rather than restrictive, the case for a rate hike is back on the table. Here’s what it means for markets heading into a historically volatile September.
In this episode, Megan covers:
– Why Chairman Warsh’s Jackson Hole speech came across as more hawkish than expected
– The Fed’s shift in focus from labor market stability to persistent price pressures
– Why more than half the PCE inflation basket is still running above 3%
– What “price stability is not self-executing” means for future Fed action
– How markets reacted across the yield curve and in equities
– Why September could bring more volatility as the market digests this speech
If you’re trying to make sense of what a hawkish Fed means for your money heading into the fall, this one’s for you.
For a history of all Markets with Megan episodes, visit: https://marketswithmegan.fm
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