September Fed Rate Decision Becomes a Coin Flip After Warsh's Speech

Fed funds futures markets sharply repriced the odds of a September rate move after the central bank chief's address at the Jackson Hole symposium. Traders had previously leaned toward a more dovish outcome, but comments expressing lingering frustration with inflation trends pushed up the probability of a hike. The odds of a hike versus a hold are now nearly even. Such uncertainty typically fuels volatility across equity and currency markets, including the dollar's exchange rate against other currencies. Private investors should watch upcoming Fed officials' remarks and inflation data closely ahead of the meeting.