Federal Reserve Chair Kevin Warsh signaled at Jackson Hole the need for additional tightening and the possibility of another benchmark rate increase. After the speech, the probability of a 0.25 percentage-point hike at the September FOMC meeting jumped to 57.4% from 35.7%, according to the CME FedWatch Tool, while the two-year Treasury yield rose 0.12 percentage points. Warsh said it was difficult to conclude that underlying price trends had improved meaningfully, stating there is still work to do. He noted the personal consumption expenditures price index has stayed above the 2% target for more than five years and that inflation must be brought back to target, reaffirming short-term rates as the primary tool. The remarks sharpened the policy split with Treasury Secretary Scott Bessent, who supports lower rates, expanded long-dated Treasury buybacks, and left open market intervention, while Warsh pushed back on restrictive conditions and favored caution on non-monetary tools. Wall Street increasingly backed Warsh, with Bloomberg saying he earned an A at Jackson Hole after a failing grade at the July FOMC and MarketWatch noting growing trust in his message. The dollar rose, gold fell more than 3% to $4,454.28, and tensions over Fed independence versus administration preferences heightened. Markets now watch the G20 meeting, Friday’s jobs report, and central bank decisions.