Economic Commentary

The speech by the Chairman of the Federal Reserve on the last full day of the Jackson Hole Economic Policy Symposium is always a highly anticipated event. This year it arguably carries more immediate significance than usual, as Chairman Warsh’s words will be delivered in the shadow of both his previous FOMC press conference and the recent actions of Secretary Scott Bessent— neither of which was particularly well received by global bond markets. 30-year Treasury yields often serve as a vote on the credibility of both Warsh and Bessent and will be closely watched throughout the week.

Consumer inflation decelerated slightly in July, new jobless claims are running well below the levels of 2025, third quarter US economic growth is estimated at approximately 3.5% and average hourly earnings are growing 3.2%. Additionally, the S&P 500 hit a new market high last Thursday, August 13. One would think that all is good but  . . . the consumer says otherwise. The day after that new S&P high, the preliminary Michigan Survey of Consumer Sentiment for August fell almost 8%, returning to the lower levels of consumer confidence that became evident in the spring of 2025.