Economy Talk

Warsh at Jackson Hole: short summary for people who skipped it

I read the GONOM post and some other coverage. Short version:

1) Warsh says Fed is not done with inflation, progress in two years only "modest". 2) No more "forward guidance", he says it "overstayed its welcome". So no promises about next move. 3) He says financial conditions maybe not restrictive enough. Al Jazeera calls this closest he came to saying hike. 4) Numbers: PCE 3.7% in July, CPI 3.4% (down from 4.2% in May). CME FedWatch had 57.4% chance of hike in mid-September.

My opinion: no guidance means markets will move more on every data release. More volatility, not less.