US Fed chief Warsh sends Wall Street lower with hawkish inflation warning
NEW YORK, Aug 29 — Wall Street stocks dipped while the dollar rallied Friday after Federal Reserve chief Kevin War...
On August 29, Wall Street stocks fell as the dollar strengthened following Federal Reserve chief Kevin Warsh's speech in Jackson Hole, Wyoming. Warsh emphasized the urgency of tackling high inflation, stating that the central bank must be confident that underlying inflation is moving towards its target at a sufficient speed. He warned that if this doesn't happen, "we have work to do."
Treasury bond yields rose, signaling anticipation of a possible rate hike in September. The dollar gained strength against the euro and other major currencies. Inflation in the United States stands at 3.7%, nearly double the Fed's target of 2%. The persistent high energy prices due to the Iran conflict have investors worried about their potential persistence as winter approaches.
While Warsh acknowledged the strong performance of the US economy, he expressed concern over the inflation numbers. Despite the hawkish tone of Warsh's speech, the S&P 500 ended the day down by 0.3%.
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