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Dollar index jumps after Warsh’s hawkish Jackson Hole remarks

The CME FedWatch Tool shows September rate hike odds rising to about 56% from roughly 36% before Warsh’s speech, helping the DXY push near 99.50.

Reported · Written up by our desk · Major Pairs

The US Dollar Index (DXY) rose on Friday, gaining 0.36% to trade around 99.50, as Federal Reserve Chair Kevin Warsh’s hawkish remarks at the Jackson Hole Symposium prompted investors to reprice the outlook for US interest rates, according to FXStreet.

Warsh said price stability should remain the Fed’s top priority, noting policymakers still have work to do if underlying inflation is not moving toward the central bank’s objective. He also reaffirmed the Fed’s 2% PCE inflation target and said summer inflation data were better than expected but not enough to show a meaningful shift in underlying inflation dynamics.

Warsh’s relatively upbeat view of the economy, including healthy consumer spending, a stable labor market, and rapidly increasing business investment, combined with persistent inflation concerns to shift expectations sharply.

FXStreet cited the CME FedWatch Tool, estimating markets now assign about a 56% chance of a Fed rate hike in September, up from roughly 36% before Warsh’s speech. The move came alongside mixed US data, including a downward BLS Nonfarm Payrolls benchmark revision of 79K jobs for the twelve months through March and a University of Michigan consumer sentiment revision to 51.7 for August.

Latest closeDollar index 99.11 ▲0.2%

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