Gold just gave back a chunk of its August rally after Fed Chair Kevin Warsh used Jackson Hole to put inflation back at the center of policy.
According to Warsh, the Fed’s job is to deliver stable prices, and the 2% PCE target is “firm” and “fixed.” Markets heard that as a tighter stance, not a shrug.
Key Details:
Spot gold sold off after Warsh’s speech, sliding from the mid-$4,600s toward and through the $4,500 area.
July PCE inflation is still running at 3.7%, more than a year and a half after the last serious “mission accomplished” talk.
Inflation has now sat above the Fed’s 2% target for 65 consecutive months.
Five years on, prices have not gone back to the old 2% world. The Fed can say price stability is the predominant focus. The data still says inflation is the new normal — and gold only sold off because traders think Warsh might finally treat it that way.
Warsh: Price Stability First — Gold Loses $4,500 as Sticky Inflation Refuses to Die
Do you think 2% is still a real target, or has the market already accepted a permanently higher price level?
According to Warsh, the Fed’s job is to deliver stable prices, and the 2% PCE target is “firm” and “fixed.” Markets heard that as a tighter stance, not a shrug.
Key Details:
Spot gold sold off after Warsh’s speech, sliding from the mid-$4,600s toward and through the $4,500 area.
July PCE inflation is still running at 3.7%, more than a year and a half after the last serious “mission accomplished” talk.
Inflation has now sat above the Fed’s 2% target for 65 consecutive months.
Five years on, prices have not gone back to the old 2% world. The Fed can say price stability is the predominant focus. The data still says inflation is the new normal — and gold only sold off because traders think Warsh might finally treat it that way.
Warsh: Price Stability First — Gold Loses $4,500 as Sticky Inflation Refuses to Die
Do you think 2% is still a real target, or has the market already accepted a permanently higher price level?
