"We Have Work to Do": Fed Chair Kevin Warsh Expresses Concern Over Inflation in Closely Watched Jackson Hole Speech

Fed Chair Kevin Warsh delivered a hawkish message at Jackson Hole, warning that underlying inflation has not meaningfully improved despite recent softer reports. Warsh told the audience the Fed must be confident inflation is moving toward its 2% target at sufficient speed, otherwise "we have work to do."

Market reaction was immediate and sharp. September rate-hike expectations jumped from 35.5% to 57.5% following his remarks, signaling traders are pricing in renewed monetary tightening ahead.

The speech marks a notable shift in tone as the Fed weighs whether recent inflation data reflects genuine progress or temporary relief. Warsh's insistence on sustained evidence of cooling prices suggests the central bank remains prepared to resume rate increases if inflation proves sticky.

For CME, which operates interest-rate futures contracts, increased volatility in rate expectations typically drives higher trading volumes as institutions reposition portfolios and hedge interest-rate risk.