BlockBeats message. On August 26, Nick Timiraos of the Wall Street Journal—known as the “Federal Reserve’s megaphone”—analyzed that Federal Reserve Chair Kevin Warsh will deliver his first major speech since taking office at Jackson Hole this week. The market’s focus will be on how he explains why U.S. inflation has remained above target, and how this assessment will affect the future path of interest rates.

The key internal divide within the Federal Reserve right now is whether inflation is mainly driven by one-off external shocks such as tariffs and energy-price increases prompted by the war, or whether U.S. economic demand is still running too hot. If it’s the former, inflation may ease as the shocks fade; if it’s the latter, it would suggest the Fed may need to further tighten policy. Timiraos believes that, in this speech, Warsh must clearly state his assessment framework and the conditions under which his interest-rate stance might change.

The article also points out that the market is testing the communication strategy Warsh adopted after taking office, which reduced forward guidance. If he believes that the previous rate cuts were too large and the economy is still overheating, he may need to push for a reversal of the rate-cut cycle. If, however, inflation is driven mainly by external shocks, the need for further tightening would be less. The market will also closely watch whether he proposes an inflation analysis framework for new conditions such as adapting to deglobalization, AI capital expenditure, and geopolitical conflicts.