Archive · 28 Aug 2026
Kevin Warsh Signals Quieter Fed in First Jackson Hole Speech
Kevin Warsh gave an important speech about how the Federal Reserve should make decisions.
He said the Fed should give markets fewer clues about exactly what it will do with interest rates.
He believes forward guidance was helpful during the financial crisis but is less useful in ordinary times.
Instead, he wants investors to study the economy itself.
He said jobs appear stable and businesses are investing and earning more money.
However, prices are still rising faster than the Fed wants.
Warsh said the Fed should keep aiming for 2% inflation.
He ended by saying he is committed to careful decision-making, not to one specific action yet.
Federal Reserve Chair Kevin Warsh used his first Jackson Hole keynote to argue for less forward guidance and more policy discipline.
Warsh said forward guidance was useful during the Global Financial Crisis but has become unsuitable for normal times.
He urged markets to focus on economic signals such as asset prices, Treasury yields, the dollar, credit conditions and commodity prices.
Warsh outlined seven policy principles, including a firm 2% PCE inflation target, short-term rates as the primary tool and a quieter Federal Reserve.
He described stable employment and resilient business activity but said inflation remains too high, committing to discipline rather than a specific policy decision.
- Who
- Federal Reserve Chair Kevin Warsh.
- What
- Warsh delivered a keynote speech outlining his approach to monetary policy, forward guidance and the United States economy.
- When
- August 28, his 100th day in office.
- Where
- Jackson Hole.
- Why
- To explain his policy principles and assess economic conditions, including persistent inflation and stable employment.
- Speech title
- “In Our Time”
- Inflation target
- The 2% personal consumption expenditures inflation target remains firm, according to Warsh.
- Latest inflation figures cited
- PCE inflation was 3.7% over 12 months and 4.1% over six months.
- Unemployment
- The unemployment rate was 4.1%.
- Capital expenditure
- Capital expenditure had increased roughly 9% over four quarters.
- Corporate profits
- Corporate profits had increased more than 20%.
- Market reaction
- Bond yields increased, while gold and silver prices came under pressure; United States stocks were nearly flat with a slight positive trend.