Warsh: Inflation Outlook Has Not Improved Sufficiently Yet
Fed Chair Kevin Warsh, in his speech at Jackson Hole, stated, "Although this summer's PCE and CPI data came in better than expected, they do not tell me that the underlying trend has improved meaningfully," noting that price stability remains the primary priority for the Fed. Warsh also reiterated that the 2% inflation target is "fixed and immutable," emphasizing that they will not adopt an approach that encourages market participants to look primarily to the Fed for their next move.
Dollar Index (DXY) Rises on Hawkish Message
The US Dollar Index (DXY) rose 0.36% to 99.50 following Warsh's speech, bringing the week close to a strong finish. The index raised the possibility of retesting the psychological 100.00 level.
Gold: Sharp Sell-Off in US Session, Daily Loss Exceeds 1%
XAU/USD was trading around $4,600 prior to the speech, but faced a sharp sell-off in the US session following Warsh's hawkish statements, falling as low as $4,531 during intra-day declines; this points to a loss of up to 1.2% compared to the pre-speech level.
EUR/USD: Below 1.16 Despite Strong Eurozone Inflation
EUR/USD fell to the 1.1609 level with a 0.38% loss, marking its lowest level since August 19. Despite annual harmonized inflation rising to 2.7% in France and to 4.5%, the highest level since 2023, in Spain, Warsh's hawkish stance pushed the dollar forward.
September Rate Hike Probability Jumps to 56%
According to CME FedWatch data, the probability of the Fed making a 25 basis point rate hike at the September meeting rose to 56-57% from the 34-36% band prior to Warsh's speech. In parallel, the 2-year US bond yield rose to 4.31%, its highest level since late July.
Ekonomik Takvim | September 15-16, 2026
🇺🇸 Wednesday, September 16
FOMC Rate Decision
Following Warsh's hawkish signals, markets priced in a rate hike probability of up to 56-57% for the September meeting. The outcome of the meeting is set to be decisive for the dollar, gold, and US bond yields.
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