Warsh to Make First Jackson Hole Speech as Fed Chair

Warsh to Make First Jackson Hole Speech as Fed Chair

Jorgelina do Rosario and Zoe Schneeweiss

Sat, August 22, 2026 at 11:00 PM GMT+3 7 min read

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(Bloomberg) -- Investors are looking for Kevin Warsh to clarify his views on how the US central bank should react to stubborn inflation when the Federal Reserve chair speaks on Friday at the annual gathering in Jackson Hole, Wyoming.

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It's not entirely clear he will deliver.

The chairman's communications strategy is off to a rocky start. After the July policy meeting, Warsh offered little insight on his views of the economy and avoided offering forward guidance on interest rates. Investors interpreted his comments as showing a lack of resolve to bringing inflation back to target, and long-term bond yields subsequently climbed to a two-decade high.

For the first time as leader of the world's top central bank, Warsh will offer keynote remarks at the Kansas City Fed's annual Economic Policy Symposium. With Treasury yields still elevated by sticky inflation and fiscal deficit concerns, he's under pressure to act more like his predecessors and give clearer guidance of how the Fed might react over the remainder of the year.

But with five task forces created by Warsh now reviewing key aspects of the Fed's inner workings, including one on communications, the chairman may simply reiterate his commitment to price stability and avoid saying how the Fed plans to get there.

What Bloomberg Economics Says:

"Warsh faces a choice: Should he use the prime-time opportunity to reassure markets the Fed has a plan to bring down inflation – something he didn't do well at his news conference following the July FOMC meeting? Or should he double down on his crusade to cut forward guidance and withhold any signal about the drivers of monetary policy?

We expect the latter, with Warsh focusing more on describing the intellectual framework for his Fed reforms. He'll likely cite evidence that forward guidance has reduced policy flexibility and muddled market signals."

—Anna Wong, Eliza Winger and Troy Durie. For full analysis, click here

More recent data have shown inflation, while still above the Fed's 2% goal, may be starting to cool. On Wednesday, the government will issue the latest personal consumption expenditures price index — the Fed's preferred inflation gauge.

Economists estimate the PCE price index rose 3.6% in July from a year ago. While that would be the smallest annual increase in four months, oil prices have been rising again this month as the Iran war drags on.

The same report is forecast to show little change in inflation-adjusted personal spending. Other economic releases in the coming week include revised second-quarter gross domestic product on Wednesday and July new-home sales on Tuesday. On Friday, the Bureau of Labor Statistics will issue its preliminary benchmark payrolls revision for the year ended in March.

• For more, read Bloomberg Economics' full Week Ahead for the US

Turning north, Canada is set to release second-quarter GDP figures, with analysts predicting the economy expanded at its fastest pace since early 2023. Potential upward revisions to earlier quarters could strip away the country's technical recession label.

That will provide little distraction from the escalating trade relationship with its neighbor: US-Canada talks fell apart at the last minute on Friday night, with fresh 50% tariffs on billions of dollars of Canadian goods taking effect and Prime Minister Mark Carney promising to retaliate.

Elsewhere, key German data, early inflation readings from Japan to France to Mexico, and a decisive vote on whether Iceland should resume its entry talks with the European Union will take center stage. Central bankers in South Korea and the Philippines may hike rates, while Hungary could cut.

Click here for what happened in the past week, and below is our wrap of what's coming up in the global economy.

Asia

Asia-Pacific is preparing for a busy schedule. In addition to key rate decisions, inflation readings will help shape the policy outlook and activity data will offer clues on economic momentum. China remains a key focus alongside Japan and India, while Australia also has a heavy run of releases.

The Bank of Korea's meeting on Thursday will be a live event after officials launched a tightening cycle in July with a hike in the benchmark rate to 2.75%. Governor Shin Hyun Song has said all options are open for August, though some economists have said authorities may wait until October so they can assess the impact of the July move.

On the same day, central bankers in the Philippines will consider a hike to the key rate by 25 basis points, to 5%. A day earlier, Thailand's central bank is expected to hold settings steady.

Australia releases minutes from the Reserve Bank's August meeting on Tuesday, followed by remarks from senior RBA official David Jacobs. Bank of Japan Deputy Governor Ryozo Himino speaks on Thursday.

Inflation also takes center stage. Australia reports monthly consumer prices on Wednesday, including the trimmed-mean inflation gauge, an important input for the RBA's outlook given lingering concerns over price pressures.

Japan's Tokyo CPI, coming off July's reading of 2%, is due on Friday and will be closely watched to determine if inflation is firm enough to keep the BOJ on its historic normalization path. Singapore releases consumer prices on Monday.

China reports July's industrial profits on Thursday, after earnings rose from a year earlier in June, giving investors another read on the health of the corporate sector in the world's number two economy.

India's industrial production follows Friday, and will be watched for evidence that domestic momentum remains resilient.

Japan has department-store sales, services producer prices and machine-tool orders through the week, along with August jobless data on Friday that had a prior reading of 2.5% for July.

Australia's calendar includes the Westpac leading index, construction work, private capital expenditure and household spending. Together with inflation and the RBA minutes, the releases should provide a broader picture of the economy and the policy outlook.

• For more, read Bloomberg Economics' full Week Ahead for Asia

Europe, Middle East, Africa

With the German economy in better shape than thought, investors will be focused on data releases Tuesday, when both the key Ifo indicator and a breakdown of GDP drivers are due.

At the end of the week, French and Spanish flash inflation numbers are predicted to show yet another uptick in price pressures — to 2.6% and 4.6%, respectively.

Euro-area data will only be revealed the following week, though European Central Bank Chief Economist Philip Lane just warned that inflation for the region will hover around the 3% level for the remainder of the year.

That helps explain why another rate hike is predicted for next month, though officials kept policy unchanged in July. An account of that meeting will be published on Thursday.

ECB officials are still mostly on summer break, though several will be going to Jackson Hole, where Executive Board member Isabel Schnabel participates in a panel on Friday.

Minutes from the Riksbank's August policy meeting are due Tuesday, the same day that officials in Hungary are expected to cut rates.

Further south, Nigeria's GDP print on Monday is set to show another strong reading, as high oil prices probably encouraged production and boosted foreign-currency liquidity, supporting consumption.

Botswana's central bank is scheduled to meet on Thursday.

• For more, read Bloomberg Economics' full Week Ahead for EMEA

Latin America

Mexico gets the ball rolling with its mid-month inflation report, which may be a harbinger of some of the heating up seen by analysts for the rest of 2026 and 2027.

The early consensus has consumer prices ticking higher from 3.14% in the second half of July, while the core print edges back up all too close to the 4% top of the central bank's target range.

Banxico expects both headline and core inflation to end 2027 back at its 3% goal, although local analysts surveyed by the bank currently forecast 3.85% and 3.84% respectively.

Brazil, too, will report mid-month inflation data. Unlike Mexico, consumer prices in LatAm's No. 1 economy look likely to take another leg down — slowing back under the 4.5% ceiling of the central bank's target range. Local analysts still see hotter readings through year-end, pushing 2026's final print to just over 5%.

Mexico's final April-June output figures look set to line up with the flash prints that came in above estimates on the back of a broad-based expansion.

Even so, headwinds including fiscal restraints along with trade and tariff uncertainly have by and large capped 2026 GDP estimates at about 1.2%.

Banxico's quarterly report posted midweek may hold fire on revising inflation projections after policymakers at their August rate meeting pushed the convergence timeline ahead to the fourth quarter of 2027.

On the other hand, GDP estimates may get a slight nudge up, or at least the 2026 forecast, which currently has a 1.1% midpoint. While that's down from an earlier projection of 1.6%, it's nearly double Mexico's 2025 output and would snap a four-year slowdown.

It's probably premature to expect any tinkering by Banxico to monetary policy guidance as real interest rates are solidly within the 1.8% to 3.6% range policymakers view as neutral.

• For more, read Bloomberg Economics' full Week Ahead for Latin America

--With assistance from Anup Roy, Erik Hertzberg, Monique Vanek, Robert Jameson, Simon Lee and Giovanna Coi.

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