The Fed’s Biggest Hawk Makes His Debut Tonight—Are U.S. Stocks About to Get Slashed After Just Partying?

At 22:00 Beijing time tonight, Jackson Hole—the global central bankers’ annual gathering.

Fed Chair Warsh’s first keynote speech since taking office. Hot topic No. 1, with 5.73 million views.

First, let’s talk about this guy’s standing in the arena: Trump’s handpicked man, privately dubbed “Volcker 2.0” by Wall Street—the tough guy who used rate hikes to force inflation to its knees and, along the way, crashed the economy.

The market has been saying for a while: He would dare to stand up to the White House on day one, with independence turned all the way up and hawkishness embedded in his DNA.

Now look at the assignment he has to turn in tonight. The data is all working against him: Core PCE is still above the 2% target, with inflation sticking like glue; initial jobless claims fell to 203,000, showing an extremely resilient labor market.

Rate cuts? The Fed has no reason to cut.

Ahead of the event, Schmid and Hammack have already taken turns sending out warnings: Inflation risks haven’t been eliminated, so don’t expect easing.

The timing is what makes it most dangerous.

U.S. stocks just finished partying: The Nasdaq rose 1.57%, Nvidia surged 8.74% in a single day, adding $442 billion in market value, and oil prices returned to $90. Everyone is betting that AI can save everything and that rate cuts are coming soon.

And tonight, the biggest hawk of them all is about to speak under the global spotlight.

Think about it, and think about it carefully: The market is popping champagne while the Fed is sharpening its knives.

If Warsh says tonight that the policy framework is not yet settled and that high interest rates still need to be maintained, how many people will wake up tomorrow morning and stare silently at their accounts?

At 22:00 tonight, are you betting that he’ll turn hawkish or dovish?