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Today is the second day of the Jackson Hole conference – here are the Fed chiefs arriving for dinner yesterday.

First, the man of the moment, Kevin Warsh.

And are a few more arrivals, including Fed governor Lisa Cook, who remains subject of Donald Trump’s plans to oust her over allegations of mortgage fraud – despite a US supreme court decision that said she should remain.

Cook received a letter from the White House earlier this month that accused her of falling “well short of the standard” required of a sitting Fed governor and requested written response to the same mortgage fraud allegations as before.

The supreme court in June ruled 5-4 that Cook was entitled to stay on as Fed governor while she fights the allegations, writing that Trump “failed to afford Cook the procedural protections to which she was entitled by statute”.

Cook’s lawyers called the allegations “as baseless now as they were a year ago”.

And here is the president of the Kansas City Fed, Jeffrey Schmid, enjoying the scenery.

Updated

There is some speculation that Kevin Warsh won’t give much forward-looking policy indications at all…

That is because he’s previously said he doesn’t think forward signals like this are useful outside of economic crises.

So what will he say?

Kathleen Brooks, research director at the trading firm XTB, reckons:

This speech could focus on bigger issues, such as how he plans to run the world’s most important central bank, and also what changes he will make and when.

While not offering direct guidance on the future of interest rates, everything he says will be scrutinised by investors, and changes that he plans to make could still trigger market volatility.”

Warsh said in July that he still hadn’t decided “whether it’s going to be a big-picture speech” or something more traditional.

Reminder: Fed governors usually use Jackson Hole to signpost where monetary policy will go in the future, and that is a key indicator for financial markets.

Deutsche Bank wrote in a note to clients on Friday:

That leaves him a few options for today. According to our US economists, they think that a ‘big-picture’ speech could include a discussion of the Fed’s taskforces, or potentially on AI’s economic impact.

Alternatively, the ‘more traditional’ speech might see Warsh do a ‘cleanup’ of the July press conference, and he may wish to counter one market narrative that Fed policy actions could be delayed until the task forces have completed their work.”

Warsh was accused by investors of sending confusing signals in his first press conference as Fed chair in July, after he expressed his commitment to curbing inflation without giving details.

Updated

Introduction: Fed's Kevin Warsh prepares for Jackson Hole speech with inflation top of the agenda

Good morning, and welcome to our rolling coverage of the global economy, the financial markets, business and the global economy.

All eyes are on a mountain valley in Wyoming today, as central bankers and economists gather close to Yellowstone national park for a top-level symposium.

Inflation, and the bond market, is top of the agenda at the annual Federal Reserve symposium at Jackson Hole this year, as the Iran war puts pressure on the global economy.

Jackson Hole has been dubbed the Davos for central bankers, and today the financial markets are bracing for a speech from the world’s most powerful central bank chief, Kevin Warsh, at 3pm UK time (10am Eastern).

Warsh is under pressure to provide clarity on how the Federal Reserve, which he leads, should deal with inflation if price pressures don’t abate. Last month he created uncertainty by suggesting that the markets, not the Fed, should take the lead on tightening financial conditions.

But investors also hope to hear Warsh’s view on the recent interference in the bond markets by Treasury secretary Scott Bessent, who has been trying to push down US long-term borrowing costs by buying long-dated bonds.

Besssent’s move appears to put the Treasury on a collision course with the Fed - lower borrowing costs will spice up the economy, undermining the battle against inflation.

Ipek Ozkardeskaya, senior analyst at Swissquote, says the stakes are high for Warsh’s speech, for three reasons:

  1. It will be Kevin Warsh’s first as Fed Chair, at a time when inflation remains stubbornly above target and long-term yields have been under pressure.

  2. Kevin Warsh is trying to change the way the Fed functions and communicates its policy to the market (or whether it communicates at all!).

  3. Investors are questioning, since Treasury announced last week that it would increase its longer-term bond buybacks to tame borrowing costs, how the Fed will respond to the Treasury’s intervention in the bond market, which – if successful – could interfere with the Fed’s policy path and the transmission of its policy to the economy.

Last month, Warsh said he wanted his speech to focus on important points such as AI and productivity, demographic changes, and the global economy’s response to shocks from the Iran war. So we shall see!

The agenda

  • 10am: Eurozone inflation report for August

  • 1.30pm: Canadian GDP for the second quarter

  • 3pm UK (10am EDT: Fed chairman Kevin Warsh delivers the keynote address at Jackson Hole Economic Policy Symposium in the US

  • 3pm: University of Michigan consumer sentiment index