The David Lin Report · Tuesday, September 1, 2026
Federal Reserve Chair Kevin Warsh delivered a speech at Jackson Hole suggesting inflation is above target and requires action, which markets interpreted as a signal for a September rate hike. This hawkish sentiment led to a sharp market downturn on Friday, with the S&P 500 selling off, gold gapping down 3%, and Bitcoin also experiencing a sell-off, while Treasury yields climbed.
“Now there is one signal nobody can miss. The responsibility for 65 months of sustained elevated inflation sits squarely with the central bank. And that's where it belongs. So here is my standard. We must be confident that underlying inflation is moving to our objective clearly and at sufficient speed. Otherwise, we have work to do. That's our job, that's our mandate, and that's our charge to keep.”
“His comment at a speech about inflation being above the Fed's target and the Fed needing to take action was interpreted as very hawkish by markets. And on Friday, markets moved down sharply.”
“Basically, markets moved the way they did because investors believed Warsh practically signaled a Fed rate hike in September.”