Report published August 28, 2026
Goldman Sachs Analysis: Fed Chair Kevin Warsh Takes Hawkish Stance at Jackson Hole Debut
Source and citation context
- Issuer
- Goldman Sachs
- Report date
- August 28, 2026
- Analysis as of
- Not stated in source
Authors / editors: Jan Hatzius, David Mericle, Alec Phillips, Ronnie Walker, Elsie Peng, Pierfrancesco Mei, Jessica Rindels, Abhay Duggirala
Finvaulta summarizes Goldman Sachs's analysis. Attribute opinions, forecasts, time-sensitive values, and chronology to the issuer and report date; do not treat this page as an independent verification or a current market-data source.
Federal Reserve Chairman Kevin Warsh delivered a hawkish Jackson Hole debut speech, emphasizing that the central bank's predominant focus remains on lowering inflation toward its 2% target. Although markets repriced the odds of a September rate hike to over 50%, Goldman Sachs continues to forecast an on-hold decision predicated on moderate August inflation prints.
Key Takeaways
- 1.In his Jackson Hole debut, Fed Chair Kevin Warsh delivered a hawkish message, stating that with inflation above 2%, the Fed's predominant focus should be on prices.
- 2.While the speech opens the door to a September rate hike if August inflation data surprises to the upside, Goldman Sachs expects core CPI and core PCE to print around 0.2% MoM and the FOMC to remain on hold.
- 3.Markets interpreted the speech as hawkish, driving a ~7bp rise in 2-year Treasury yields and pushing the market-implied probability of a September rate hike to slightly above 50% (from ~30%).
Table of Contents
- BOTTOM LINE:
- MAIN POINTS:
- Disclosure Appendix
Report data
Market reaction and policy path chart
| Metric | Estimate | Context |
|---|---|---|
| Fed Price Stability Objective | 2.0% | Fed's firm, fixed target measured by the PCE index. |
| Share of goods and services in PCE basket with price increases > 3% | 54% | Well below post-pandemic highs of ~77% but well above pre-pandemic 2-decade level of 32%. |
| Private domestic final purchases growth pace | nearly 3% | Increased at a pace of nearly 3% so far this calendar year, partially distorted by tech imports for AI. |
| US 2-Year Treasury Yield Change | 7 bp | Post-Jackson Hole speech move in the 2-year Treasury yield. |
| Market Implied Probability of September Fed Rate Hike | >50% | Market pricing for a rate hike at the September FOMC meeting following Warsh's speech. |
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Authors / Editors
Reported Data Context
- Fed Price Stability Objective: 2.0 % · Source: Federal Reserve
- Share of goods and services in PCE basket with price increases > 3%: 54 % (past 12 months) · Source: Federal Reserve / Goldman Sachs
- Private domestic final purchases growth pace: nearly 3 % (2026 YTD) · Source: Federal Reserve
- US 2-Year Treasury Yield Change: 7 bp (2026-08-28) · Source: Goldman Sachs Global Investment Research
- Market Implied Probability of September Fed Rate Hike: >50 % (2026-08-28) · Source: Goldman Sachs Global Investment Research
Securities
Themes
Regions
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