Warsh sets the bar, but his own data does not clear it
No explicit signal, a standard rather than a path. Fed Chair Kevin Warsh used his first Jackson Hole address to set a test, not a direction: the Fed must see underlying inflation moving to 2.0% clearly and at sufficient speed, or there is more work to do. He closed by saying he was committed to a discipline, not a decision, and stopped short of explicitly calling for higher rates. We would caution against reading the speech as a shift in the burden of proof from holdunless to hike-unless. Warsh set out what would justify acting, without saying the bar has been met.
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