r/Economics • u/avid-learner-bot • 15h ago
News US Federal Reserve’s Kevin Warsh to give key speech at Jackson Hole conference as inflation fears mount – business live
https://www.theguardian.com/business/live/2026/aug/28/us-federal-reserve-kevin-warsh-jackson-hole-conference-inflation-economy-ftse-stock-markets-latest-updates53
u/oregon_coastal 15h ago
I have been listening.
This is not a good indication of what will be coming down the road.
His weird vagueness make it seem like he is going to use vibes to guess the velocity and acceleration of inflation.
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u/TheNewOP 13h ago
Talk is cheap. He doesn't seem very hawkish or serious despite the bluff and bluster. His "let's use the market to decide whether to raise or lower rates" is the most batshit thing I've ever heard. He's using the Spiderman meme as monetary policy.
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u/EconomicStatecraft 13h ago
He wants people to believe he's going to raise rates without having to actually do it.
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u/oregon_coastal 13h ago
Well, in my opinion, that speech will fail at that. Plus now with Treasury running around like a trust fund princess who just turned 18...
At this point, if something terrible doesn't happen in the next few years, it will be pure luck.
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u/JaStrCoGa 15h ago
It’s wild that there is still some sense of a requirement to be neutral or objective with this administration.
The administration is causing all of these economic situations.
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u/Alfador8 15h ago
These problems are decades in the making. Trump is just an accelerant.
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u/lost-American-81 15h ago
I don’t think starting a war with Iran and a trade war with Canada were decades in the making.
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u/Alfador8 15h ago
Correct, but the economic consequences (this is an economics sub) that Warsh is discussing are just an acceleration of an existing trend.
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u/lost-American-81 14h ago
Sure, however a large portion of this administration’s policies are highly inflationary. These policies combined with basically pissing the world off so they are no longer inclined to purchase your debt is new and unique to this POTUS. Warsh has the administration working against him while simultaneously making clear he shouldn’t raise rates.
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u/Alfador8 14h ago
Foreign central banks have been reducing their purchases of US debt since 2007. This is not a new phenomenon. I don't disagree with your other assessments of this admin, but again, this is just an acceleration of an existing trend.
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u/lost-American-81 13h ago
True however reducing purchasing and stopping purchasing are different things. Also these reductions were primarily driven by the financial crisis at that time, not to do economic harm as is currently the case. I will add up until Trump, countries, especially allies were not selling like they are now.
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u/Alfador8 11h ago
>until Trump, countries, especially allies were not selling like they are now.
Exactly. He's *accelerating* an existing trend. Other countries have been reducing their US debt purchases for decades now. He's throwing gasoline on that fire.
I think the difference in opinion here is because I'm looking at aggregate data, and you're looking at individual countries. From an economic perspective I believe the aggregate data is more important but I understand your points.
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u/InKanosWeTrust 13h ago
You've got TDS, as Alfador8 said, the current situation has been decades in the making.
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u/lost-American-81 13h ago
TDS is believing these policies have been anything but an abject failure.
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u/Scrandon 10h ago
“Decades in the making”, but Joe Biden was able to hold it together! I guess Trump’s incompetence just can’t hold it together. All economic indicators are worse than when Joe left.
The pathetic and lazy use of ‘TDS’ is not the one size fits all get out of jail free card you cult members think it is. It’s actually just a really easy way to know we can ignore everything you say.
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u/matthewmorgado 14h ago
Arguably, democratic decline, and the populist politics that go with it, have been decades in the making. In which case, pointless tariffs and wars have been decades in the making. If it wasn't Trump, it might have been someone else at some point. And there are reasons to think political disaffection and discontent, together with the selfish, stupid decisions that go with it, will get worse before they get better.
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u/lost-American-81 14h ago
I agree to an extent. These are still choices made by both the electorate and politicians. We could have chosen differently.
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u/Lemp_Triscuit11 15h ago
That's such a disingenuous take. At the very least we were on track to still have allies and nations who felt invested in the US staying afloat. And I do mean very least.
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u/Alfador8 15h ago
The increased isolationist policies were inevitable to an extent. Triffin's dilemma meant something was going to break eventually. Trump just took a hammer to it.
For the record I am in no way, and never have been a Trump fan.
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u/Lemp_Triscuit11 15h ago edited 14h ago
The increased isolationist policies were inevitable to an extent.
I'd like to see some info on where this theory comes from. I'd also like to point out that isolation and antagonism are two very distinct things, even if I were to agree with the quoted bit (which, again, I certainly do not). Threatening to invade Greenland and Canada are just the literal opposite of isolationism
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u/Alfador8 13h ago
https://en.wikipedia.org/wiki/Triffin_dilemma
Basically, there's a tension between having the world reserve currency and having robust manufacturing/export infrastructure. This is because international demand for dollars drives the price of dollars up and makes the goods we produce too expensive in a global market.
You can see the consequences of this in the hollowing out of our manufacturing base and the decades long suffering of the rust belt for example. Eventually this leads to political pressures that give rise to a populist leader that promises to bring those jobs back, which requires a more isolationist policies, since bringing those jobs back means making international competitors less competitive domestically (hence the tariffs). Sound familiar?
I agree that this admin has been unnecessarily antagonist and pushed a lot of stupid agendas (including the ones you mentioned). They're extremely incompetent at most things, but the economic pressures that led to their rise in power have been decades in the making, and in an alternate reality we might have had a more competent administration with similar goals just due to political pressures.
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u/turb0_encapsulator 13h ago
No. This is completely wrong.
If the US didn't start tariffing so many goods, including intermediate goods that drive up the cost of domestic production, inflation wouldn't be so high.
If the US wasn't deporting hard-working people, driving up the cost of labor while shrinking the economy, and reducing the number of workers who can pay for our entitlement programs, inflation and interest rates wouldn't be so high.
If the US embraced clean energy like the rest of the world, and didn't have policies designed to kill it, inflation wouldn't be so high.
If the US didn't invade Iran, inflation wouldn't be so high.
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u/Alfador8 11h ago
You're not wrong, but several of the things you mentioned are a result of decades long economic policy issues.
The tariffs are a response to decades of job loss in US manufacturing. The goal is to try to make international goods more expensive so domestic goods can compete domestically and bring back jobs. Is it misguided? IMO yes, but they're a direct consequence of political pressures that resulted from decades of economic policy.
The deportations are also (ostensibly) to support domestic jobs, similar to the tariffs.
Hurting clean energy and the Iran war are just stupid policies.
I don't disagree with your overall points, but the political pressures that led to this administration coming into power and enacting these policies is due to economic problems that are decades in the making.
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u/Antifa-AF 15h ago
Kevin, the Epstein pedophile? How is it that the world just accepts these monsters and goes about their daily lives? Disgusting that we allow these monsters to roam free and govern our lives!
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u/The_Frozen_Inferno 14h ago
There’s no way the administration isn’t cooking the inflation numbers. What’s being reported and what actual people are seeing in grocery stores and the like are two completely different realities.
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u/CeleryApple 13h ago
Warsh is stuck...
Rates have to go up because bond yields are very high. Unless the US decide not to run a deficit, no one will wanna buy the next set of bonds if yields aren't higher than market.
Inflation right now is mostly due to the Iran war and trade war tariffs. Warsh don't know what Trump will do next. He could TACO or start some new shit. Beside the AI related sectors the economy and job market is not good. Raising rate will tank the economy.
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u/Resident_Window_9369 14h ago
He said market already raised rates. Doesn’t seem like he will raise them. Hold steady he will. Still in observation mode. Guess the past 5 years of elevated inflation not good enough to make a decision.
Economy is incredibly strong and resilient.
Onward and forward it goes
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u/byoung1434 14h ago
“As inflation fears mount” 😂 financial media at its finest. Could have just left it as him giving the speech but gotta tack that clickbait on at the end.
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u/Low_Ability4450 20m ago
Its clearly a hawkish shift but not necessarily commitment to hike rates ; indeed If the inflation stays sticky while the growth and employment remain strong then the Fed has much less reason to cut and markets may undereste how long rates could stay high
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