Kevin Warsh, a former Federal Reserve Board governor, delivered a keynote speech at the annual Jackson Hole symposium that significantly shifted investor expectations regarding a potential September rate hike. According to prediction market platform Kalshi, traders now assign a 48% probability to a 25 basis point rate increase, compared to nearly 70% before his speech. The CME FedWatch tool shows roughly 56% chance of such a hike, while Polymarket indicates 49% odds. Warsh stated that recent inflation readings, while better than expected, do not demonstrate meaningful improvement in underlying trends, calling on the Fed to remain vigilant. In response, the 2-year Treasury yield hit its highest level since late July.
Source: Read the original article
