Federal Reserve Chair Kevin Warsh used his August 28 Jackson Hole speech to reaffirm the central bank’s 2% Personal Consumption Expenditures (PCE) inflation target, while recent inflation readings remained between 3.3% and 3.7%. He said the Fed would need to act if underlying inflation failed to improve. Markets responded by pushing the probability of a September rate hike to roughly 50%-60%, while the 2-year Treasury yield rose about 9 basis points. Warsh also promoted a quieter Fed approach centered on real-time economic data rather than detailed forward guidance (signals about future interest rates). Economist Paul Krugman said the speech was "utterly conventional," arguing that its framework closely resembled policies associated with Janet Yellen and Jerome Powell, despite Warsh’s positioning as a break from the previous decade’s communication-heavy approach. Warsh assumed the chair in May 2026 and has since created task forces on inflation, communications and data practices, but the Jackson Hole address provided limited insight into their work. Investors continue to focus on PCE readings, employment data, Treasury yields and the dot plot as the main indicators for the rate path.