Federal Reserve Chair Kevin Warsh, under great Wall Street pressure Friday to say something about something in his Jackson Hole bankers’ conference speech, let escape a judgment which was not entirely credible, shall we say. Acknowledging only “some signs of strain” in housing (the housing market is frozen, ever deeper as the year goes on and heading for only 4 million total sales) and agriculture (farm income is down 2.6% from 2025), Warsh said as the Wall Street Journal reported, that otherwise, it did not look as if monetary conditions were “restrictive"—meaning they could be tighter.
So, having bowed to his Wall Street critics and given what sounded a lot like “forward guidance” that interest rates could be further raised this year ("It looks like we have some work to do"), Warsh retreated from his Jackson Hole podium and watched interest rates on 10-year Treasury bonds rise quickly by 5 basis points, the dollar jump up, and oil prices rise by a dollar. Neither President Trump nor Treasury Secretary Scott Bessent could have been very happy.
