Week ahead: DAX leads gains as Warsh's Jackson Hole debut turns hawkish
Last week ended the way this Fed cycle keeps ending: with markets moving more on what a policymaker said than on anything a data release showed. New Fed chair Kevin Warsh used his first Jackson Hole keynote on Friday, marking his hundredth day in the job, to say he isn’t convinced inflation’s underlying trend has improved even after a run of better-than-expected summer prints, and traders responded by pushing the odds of a September rate hike up to 55.7%, about twenty percentage points higher than the day before. All three indices closed the week higher regardless, DAX out in front on an automaker-led Friday rally that pushed it to a fresh all-time high, while Dow and Nasdaq both remain a little below their own record levels. The real test of whether Warsh’s tone holds up lands Friday, when August’s jobs report either backs up his inflation concerns or repeats July’s shock 23,000 miss and undoes the very odds his speech just built. ...