Federal Reserve Chair Kevin Warsh began his highly anticipated speech in Jackson Hole, Wyoming. In his first address as Fed chair, Warsh tackled inflation as the central issue, speaking in a hawkish tone and emphasizing that price stability should be the Federal Reserve’s top priority. He noted that summer inflation data showed improvement, but underlying trends had not changed significantly.
Key remarks from Warsh at the conference:
- "I find it difficult to describe the current financial situation as constrained."
- We must ensure that the downward trend in inflation is moving toward the intended target; otherwise, we will have additional work ahead.
- This summer’s inflation numbers are better than expected, but don’t tell me that the underlying trends have changed materially.
- Consumer spending is in good shape, and labor markets are stable.
- The Fed must ensure inflation remains stable.
- The economy is still generally strong: consumer spending is healthy, labor markets are stable, and investment in the business sector is growing rapidly.
- At the July meeting, there was "a good majority" that supported waiting before changing interest rates.
Bitcoin reaction: immediate pullback
Before the Warsh speech, Bitcoin was trading at around $79,000, but it fell to $78,000 immediately after the speech, in a quick response to the hardline tone carried by the remarks.