Warsh World

Fed Chair Kevin Warsh isn’t one to give the markets a heads-up. Investors are trying to translate what he says into what he would like the Fed to do. To that end, Ed and Elias parse Warsh’s remarks last week at the Jackson Hole symposium. While Warsh’s assessment of economic conditions is hawkish, is it just hawkish squawk or indicative of his vote at September’s FOMC meeting? Whether he backs raising or maintaining the current federal funds rate may hinge on whether August inflation data suggest persistent weakness. But Warsh’s Jackson Hole comments did give the FOMC’s hawks some support and did shed some light on his policy approach.