🚨Gold, silver, U.S. stocks, and cryptocurrencies fell by more than $2.3 trillion over the past four hours.
This drop began immediately after Kevin Warsh’s first speech at Jackson Hole as Chairman of the Federal Reserve. Before the start of the day, markets did not expect rate hikes.
Inflation had risen sharply earlier this year due to the Iranian war and oil prices, then began to decline in recent months. Because of this decline, most traders expected the Federal Reserve to keep interest rates unchanged in September.
The odds of a rate hike in September were about 34%, meaning the chances of no change were roughly 70%. A Bank of America survey showed that 69% of fund managers expected Warsh to take a neutral stance.
Warsh described the 2% inflation target as “steady and unchanged,” and said inflation will not correct itself without intervention from the Federal Reserve. He also said that improved inflation data in the summer did not prove that the underlying trend had improved.
This means that declining inflation data did not change the Federal Reserve’s approach. He added that financial conditions are not restrictive at the moment. This implies that the Federal Reserve does not believe current interest rates are restrictive enough to slow the economy.
This drop began immediately after Kevin Warsh’s first speech at Jackson Hole as Chairman of the Federal Reserve. Before the start of the day, markets did not expect rate hikes.
Inflation had risen sharply earlier this year due to the Iranian war and oil prices, then began to decline in recent months. Because of this decline, most traders expected the Federal Reserve to keep interest rates unchanged in September.
The odds of a rate hike in September were about 34%, meaning the chances of no change were roughly 70%. A Bank of America survey showed that 69% of fund managers expected Warsh to take a neutral stance.
Warsh described the 2% inflation target as “steady and unchanged,” and said inflation will not correct itself without intervention from the Federal Reserve. He also said that improved inflation data in the summer did not prove that the underlying trend had improved.
This means that declining inflation data did not change the Federal Reserve’s approach. He added that financial conditions are not restrictive at the moment. This implies that the Federal Reserve does not believe current interest rates are restrictive enough to slow the economy.
