Warsh’s Jackson Hole speech may weaken dollar, CBA strategist says

Federal Reserve Chair Warsh is expected to use his Jackson Hole speech to pursue four goals: restore confidence in the central bank’s commitment to controlling inflation, ease concerns about fiscal dominance, reassure markets that reducing reliance on forward guidance will not undermine financial stability, and strengthen confidence in the Federal Reserve’s working groups. Samarra Hammoud, a foreign-exchange strategist at Commonwealth Bank of Australia, said the objectives are ambitious and that markets should remain skeptical that communication alone can achieve them. Given Warsh’s aversion to forward guidance, investors may view his inflation messaging as insufficiently hawkish, which could weigh on the dollar.

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