A hawkish word from Jackson Hole moved more than a rate did

Nvidia's results were the best news of the week; Kevin Warsh's speech undid most of the market's enthusiasm for it. Neither changed anything the Fed has actually done.

Abhineet RaiFounder · Wealth Adviser Week ending Friday 28 August 2026 About a five-minute read

The week in figures

Each figure as at its own date · sources below

Bank Rate 3.75% Unchanged27 Aug ECB refinancing rate 2.40% Unchanged28 Aug Fed funds target 3.50–3.75% Unchanged28 Aug UK 10-year gilt 5.01% −4 bps26 Aug US 10-year Treasury 4.73% −1 bps28 Aug US 2-year Treasury 4.34% +10 bps28 Aug GBP / USD 1.3583 −0.5%28 Aug GBP / EUR 1.1666 −0.1%28 Aug Brent crude $88.24 −9.0%25 Aug

UK CPI inflation 2.9% +0.3 pp31 Jul

The market repriced a governor's tone, not a rate that moved

The week's two events were unconnected until markets connected them. On Wednesday Nvidia reported revenue of $96.2 billion, up 106% on the year, and guided to growth well above what analysts had modelled.1 The Nasdaq rose 1.57% the next day on the news.2 By Friday that gain was mostly gone, because Kevin Warsh used his first Jackson Hole address as Fed chair to say that recent inflation readings, while better than expected, do not tell him underlying trends have improved. Odds of a September rate rise implied by fed funds futures jumped to 57%.3

Nothing about the Fed's actual setting changed this week. The funds rate stayed at 3.50–3.75%, where it has sat for five meetings, and no one voted on anything. What moved was a probability attached to a meeting three weeks away, on the strength of one speech. That the S&P 500 could give back most of a Nvidia-driven rally on a shift in a single official's language is not a comment on the company or the chip cycle. It is a comment on how little conviction sits behind the market's own inflation view, and how quickly that view reverses when someone with a vote describes it differently.

The same pattern showed up at the ECB, whose account of its July meeting, published this week, records that policymakers were already discussing a further rate rise, possibly in September, to contain the effects of the Iran conflict on prices.4 The Bank of England did not meet this week either, and Governor Bailey used a television interview rather than a policy statement to say the UK is not yet seeing significant second-round inflation effects, a form of words that commits him to nothing before the 17 September decision.5 Three central banks, no changes, and yet the week's positioning moved as though something had been decided. That is not evidence the picture has become clearer. It is evidence that markets are still trading a single narrative about inflation risk that any senior voice can tip in either direction, which says more about how thin conviction is than about how much has actually changed since last week.

Abhineet RaiFounder · Wealth Adviser, Rai Wealth Management

Equities

US · UK · India

The S&P 500 gained 0.5% on the week and the Nasdaq 0.9%, but the path mattered more than the total.3 Nvidia's results lifted the Nasdaq 1.57% on Thursday, its best day in weeks.2 Kevin Warsh's Friday remarks at Jackson Hole reversed part of that, with the S&P 500 falling 0.25% on the day as rate-rise odds firmed.3
The FTSE 100 closed the week at 10,824.26, little changed on a five-day basis, held back by gilt yields near 5% and an unresolved Iran conflict that continues to weigh on energy shipping routes.6 European tech stocks took their own cue from Nvidia, with the Stoxx Europe Tech index adding 1.8% in early trading the day after the results.7
India's Sensex rose 0.43% and the Nifty 0.35% on Friday, snapping a two-day losing streak led by IT and pharma shares.8 Over the month, though, both indices fell, their first monthly declines since May, as crude prices and US rate expectations weighed on sentiment even as India's IPO market had its strongest month in a year.9

Rates & Fixed Income

UK · US · Eurozone

No central bank met this week, and the Fed funds target held at 3.50–3.75%, the Bank Rate at 3.75%, and the ECB refinancing rate at 2.40%. What moved instead was expectation. Warsh's Jackson Hole speech pushed the implied probability of a September Fed rise to 57%, from a lower figure earlier in the week.3
The Fed's own July minutes, released this week, showed policymakers still concerned that financial conditions may not be restrictive enough to bring inflation down, with some officials open to further increases.10 The ECB's account of its July meeting struck a similar note, recording that a further rate rise was seen as likely, possibly as soon as September, to offset the inflation effects of the Iran conflict.4
The UK 10-year gilt yield eased 4 basis points to 5.01%, and Governor Bailey told Bloomberg he sees no significant second-round inflation effects yet, language that keeps the Bank's options open ahead of its 17 September decision rather than closing any of them.5

Commodities

Oil & gas · Gold

Brent crude fell 9.0% on the week to $88.24, and WTI fell 3.8% to $83.90 a barrel, both easing from levels that had been supported by the continuing Iran conflict and its effect on Strait of Hormuz shipping.11 Henry Hub natural gas fell 4.3% to $2.70 per million BTU.12
Gold slipped 0.4% on the week to $4,562.75 an ounce, a small move given how much the dollar and rate expectations shifted around it.13

Currencies

GBP

Sterling fell against the dollar this week, moving with the broader dollar strength that followed Warsh's hawkish tone rather than for any reason specific to the UK. It was little changed against the euro.

What I'm Watching

The week ahead

The ECB meets on 10 September, and after its July account flagged a likely further rise, the question is whether the decision matches that signal or defers it again.4
The Fed's next meeting is 15 to 16 September, and futures markets now price a real chance of a rise there, up from a much lower probability before Warsh spoke.3
The Bank of England decides on 17 September, with Bailey's careful language this week leaving it genuinely open which way the vote falls.5
G20 finance ministers and central bank governors meet in Asheville, North Carolina, at the start of the week, with Lagarde and the Bank of Japan's Ueda attending in place of Jackson Hole.14

Sources

Market Snapshot figures from Bank of England, ECB Data Portal, New York Fed, US Treasury, EIA and ONS. Contains public sector information licensed under the Open Government Licence v3.0.

Abhineet Rai

Founder · Wealth Adviser, Rai Wealth Management

Abhineet founded Rai Wealth Management after more than two decades in banking, including spells as a Director in Private Banking at Credit Suisse, Bank of Singapore and HSBC Private Bank in London. He trained at the National Defence Academy in India before taking an MBA, and holds certifications in Investment Planning, Securities & Derivatives, and Regulated Mortgage advice.

20+ years in banking
Credit Suisse · Bank of Singapore · HSBC
NDA-trained, then MBA

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