Investors heartened by Warsh inflation talk, still uncertain about Fed action

Investors heartened by Warsh inflation talk, still uncertain about Fed action

By Lewis Krauskopf, Saqib Iqbal Ahmed and Laura Matthews

Fri August 28, 2026

The charts show a big bump on the Dow up some 260 until 11:30, then crashing down to zero for the rest of the day with a similar pattern on the S&P but the Nasdaq sliding more deeply into the red with a 3-digit loss by close. But all reports today focused on Warsh’s speech at Jackson Hole in which he spelled out that inflation was still not being curbed and that rate hikes may well be in the Fed’s future.

Oddly, though these remarks were not exactly what was hoped for, investors took comfort in the fact that at least for a change they were getting a clearer picture of Fed intentions. But anxiety remains as to when the Fed might take action. As today’s expert put it, “We now have a better understanding of where he wants inflation to go, but relatively little guidance on what combination of inflation and labor data would cause the Fed to act.” Still, the speech is expected to calm down the anxiety-ridden bond market somewhat but the odds of a September hike have now bolted from 35% yesterday to 57% today. Per the CBOE, volume came in at 16.1 billion, right in line with the 16.03 average. 

DJ: 53,569.44  +105.56       NAS: 26,541.35  +411.16       S&P: 7,730.99  +55.29           8/27

DJ: 53,559.99  -9.45            NAS: 26,402.42  -138.93        S&P: 7,711.76  -19.23           8/28

Fri 8-28-26 Investors heartened by Warsh inflation talk, still uncertain about Fed action | Reuters