Kevin Warsh used his Jackson Hole address to signal that the Fed is prepared to raise rates if inflation does not come down sufficiently. Markets took it seriously — Wall Street has moved to price in a meaningful probability of a September hike. The FT and Al Jazeera characterise the tone as hawkish, though the Economist notes that markets actually welcomed the speech for giving a cleaner read on his thinking than they had before. The nuance worth holding onto: Warsh was clearer on the inflation threshold than on the precise reaction function, so there’s still ambiguity about how quickly he’d move. Dollar strengthened on the back of it; Treasuries sold off at the short end.

Separately, former IMF deputy Gita Gopinath told the FT that Trump’s tariff regime amounts to “straight-out protectionism” and flagged looming threats to the dollar’s reserve status. She frames it as a “great gamble.” Nothing new in the substance, but the source carries weight and it lands the same week Warsh is tightening the screws — two vectors of dollar uncertainty pulling in opposite directions.

The FT also has a piece on whether China emerges as the strategic winner from the US-Iran conflict, with Beijing threatening “all necessary measures” if Washington extends sanctions pressure to Chinese entities. Worth watching as a secondary constraint on US foreign policy flexibility.

Meta settled with 29 US states over child safety claims on Facebook and Instagram for $18bn. The tell is in the share price: it went up on the news, initially by 5%, settling around 1.25% higher. Markets read it as a bullet dodged rather than a turning point. For anyone thinking about big tech regulatory risk, that price action is the data point.

A federal judge has ruled that the Trump administration’s blacklisting of Anthropic — reportedly over the company’s refusal to support lethal autonomous weapons and mass surveillance — was illegal. It’s a narrow ruling but it matters for the AI sector’s relationship with federal procurement. Open-weight AI firms are meanwhile being flagged as the hottest acquisition targets in the Valley right now, with capital flowing heavily into that segment.

The Nepal flash floods have killed at least 538 people with over 1,500 missing. Thirty-three British nationals remain unaccounted for, including two children. The Foreign Office will be under pressure; families are travelling to the region as fears of a second wave mount.

The US personal consumption expenditure data for July is due out later today, the Fed’s preferred inflation gauge. Given Warsh’s Jackson Hole tone, a hot print would sharpen the September rate hike conversation considerably.

Sources

TechCrunch, BBC News, Ars Technica, Al Jazeera, The Economist, Guardian, FT, Politico — 2026-08-28