11AM Hour: Highlights from Fed Chair Warsh's Jackson Hole Speech, Dan Niles on Tech & Today's Earnings Movers 8/28/26

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**Carl Quintanilla** (1:01)
Good Friday morning. Welcome to Squawk on the Street. I'm Carl Quintanilla with Contestant Brewer here at Post 9 of the New York Stock Exchange. Sara Eisen is off today. The Fed chair last hour expressing some concern about inflation and advocating for a quieter central bank. Market's sitting at some session highs, got the VIX rolling over as we got that perhaps clearing event for the month underway. This hour we'll dig into all the investor implications, both for the equity and fixed income markets with David Bianco and Ashok Bhatia.

**Contessa Brewer** (1:28)
Plus the impact on the tech sector. Could the AI borrowing binge keep rates elevated? We'll discuss with veteran tech investor Dan Niles.
Did we get more clarity here or more confusion around the Fed's rate policy path? Former Chicago Fed President Charles Evans joins us.

**Carl Quintanilla** (1:46)
Let's begin with some highlights from the Fed Chair's speech in Jackson Hole. We'll get back to Steve Leesman, who has had a little more time now to process what we heard last hour.

**Steve Leesman** (1:53)
Steve?
Yeah, I think Kevin Warsh in his debut or inaugural speech here in Jackson Hole, delivering an unquestionably hawkish speech saying inflation is too high. There are a few signs the Fed is too restrictive. Look at the economy and he's not confident inflation moving back to the Fed's 2% target.

**Kevin Warsh** (2:12)
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.

**Steve Leesman** (2:37)
At the same time, Warsh was bullish on the economy. He signaled out AI CapEx Investment and noted that consumers and businesses have proven to be remarkably resilient amid recent shocks. For the first time, Warsh provided details on indicators that he is watching to gauge the economy. He is really reacting and meeting critics halfway who said he had not offered enough information on his thing. Here is a quick list of things that he is looking at. PC Inflation 12 Months, 6 Months Indicators, PDFP, a gauge of GDP growth, Credit Spreads, which he said are not blowing out, Growth and Earnings, Showing Resiliency in the Economy, and Inflation Breath, that is the percent of indicators in the PC that are above 3%.
He didn't like those numbers. Well, look at how the markets reacted to probabilities here when it comes to Fed hiking rates. In September, up to 57% now from 35 before the speech and getting more and more confident of a hike as the year goes by to 86% come December. Warsh sucked his guns though when it came to his views about communication and the Fed not telegraphing where it's going saying a quieter Fed he thinks is a better Fed, but he did show he was willing to offer more on his economic views than he had in the past, Carl.

**Carl Quintanilla** (3:45)
Steve, long end, 516, 10 year down a bit. You think the long end is a believer here?

**Steve Leesman** (3:54)
I think the long end is thinking about believing it. I think that's part of what has to happen here. Look, remember, he didn't guarantee it. He didn't say we're going to be hiking rates. He's still a little bit circumspect about those rate hikes. The market thinks he's closer to doing so. You have to have a couple more months of inflation indicators here. There's going to be an adjustment to the methodology of one of the indicators, the Fed watches.
The market, I say the long end is a little more confident of rate hikes, but still a little circumspect. Whereas the two-year and the shorter duration, well, they're going to be much more affected, but obviously, if the Fed hikes rates here, so they're going to be much more sensitive, and that's obviously why you're getting that more reaction on the short end than the long end. I am a little surprised given how hoggish I thought this speech was, that there wasn't more reaction on the long end, but we'll have to wait and see.