Fed Chair Warsh's Jackson Hole Remarks Stir Markets
Fed Chair Kevin Warsh stated that inflation remains high and financial conditions are not sufficiently tight. As no direct signal for a rate hike at the September meeting was given in the speech, markets stabilized after an initial reaction.
The speech delivered by US Federal Reserve (Fed) Chair Kevin Warsh at the Jackson Hole Economic Policy Symposium caused short-term fluctuations in financial markets and cryptocurrencies.
Messages on Inflation and Financial Conditions
Fed Chair Kevin Warsh emphasized commitment to the 2 percent inflation target, stating that he is not yet convinced that the decline in price pressures is permanent. Warsh expressed that credit and financing conditions do not appear tight enough to significantly slow down the economy.
Latest Situation in Cryptocurrencies and Stocks
Bitcoin, which was at the $80,000 level before the speech, and Ethereum, around $2,500, recovered their losses after a pullback during the statements. For Bitcoin, which exceeded $81,000 during the week, spot ETFs saw inflows of approximately $2.8 billion in eight days.
September Meeting and the Bond Market
The main factor easing the selling pressure in the markets was that Warsh did not give a clear rate hike signal for the FOMC meeting on September 16. Following the stance of the Fed Chair, who said decisions would be data-dependent, the US 2-year bond yield rose to as high as 4.29 percent.