Closing Bell: 8/28/26

**SPEAKER_1** (0:00)
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**SPEAKER_2** (0:27)
Courage.

**SPEAKER_3** (0:28)
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**SPEAKER_2** (0:30)
Hold my hand.

**King Lip** (0:31)
You hold my hand.

**SPEAKER_5** (0:33)
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**SPEAKER_1** (0:37)
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**SPEAKER_5** (0:38)
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**SPEAKER_3** (0:40)
Department of Health and Human Services and the Ad Council.

**Contessa Brewer** (0:43)
And welcome to Closing Bell. I'm Contesta Brewer. I'm in for Scott Wapner today. This is a make or break hour, and it begins with the market really digesting comments here from Fed chair Warsh out of Jackson Hole today. The best among Fed funds futures traders are that the Fed is going to raise rates. Those odds increased to 60%, almost 70% after his remarks. Let's get a check on where things stand with 60 minutes to go in regulation. Right now, you're looking at all the indices in the red. The Dow is off just fractionally.
The S&P 500 off by a third of a percent. The Nasdaq composite a little more than half a percent. And the Russell 2000 is showing the most decline down a percent and a third. Treasuries at this hour have been on the move as well. You can see the two year moving higher, 4.35 now. The five year, 4.48.
And the 10 year is up to 4.72. It's that 30 year treasury at 5.2. The investors are also digesting more earnings as well. Of course, shares of gap surging after reporting results. And a new CEO for its Old Navy brand, which dragged down the parent company, Marvell, sliding. We have reports on those movers and more ahead. Marvell's off by 10.5% now. First, it was Fed Chair Warsh's big moment in Jackson Hole. Let's get straight to Steve Leesman, who was there for those comments. Steve, how are those who are in attendance in Jackson Hole digesting what Chair Warsh had to say?

**Steve Leesman** (2:16)
Well, this first inaugural speech in Jackson Hole from Kevin Warsh was, it was basically more detailed and hawkish than expected by markets and participants here. Warsh said inflation is too high, there are a few signs the Fed is too restrictive, and he's not really confident that inflation is necessarily moving back to the Fed's 2% target.

**Kevin Warsh** (2:37)
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** (3:02)
But he stopped well short of firmly predicting rate hikes and stuck to his announced plans not to offer guidance about where the Fed is headed. What he did do was provide details on the kind of economic indicators he's watching to gauge the economy. He's reacting to critics who said he had previously not offered enough information on his thinking.

**Kevin Warsh** (3:21)
Over the last 12 months, 54% of goods and services in this basket showed price increases above 3%. This is well below the post-pandemic highs of about 77%, but it remains well above the level of 32 in a couple of the decades that preceded the pandemic.

**Steve Leesman** (3:43)
That kind of hawkish inflation analysis led futures markets to increase the probability of September rate hike. We're now at 57% for a September hike up from 35 before the speech, and start the price in a second hike later next year even. But with Warsh not revealing more about which way he's leading markets, they have to figure it out more on their own, a point that critics say just leads to more volatility and ultimately, higher bond yields can test it.

**Contessa Brewer** (4:08)
Let me just ask, when we're watching those odds moving for a September rate hike, and by the way, they're doing that on Cal-She too. Cal-She odds that the Fed would hike and whether it would hold, now they're about roughly even on Cal-She.
Do you think that Chair Warsh has convinced the committee to go along with him, whichever way he moves in September?

**Steve Leesman** (4:33)
You know, I have to say that I think Warsh has moved more towards the center of his committee. I'm not sure he came in thinking much about hiking interest rates, and I think he's encountered a hawkish committee, and I think the data has broken maybe marginally more towards those hawks on the committee, so he's sort of moved there. I mean, this is a change contested compared to the press conference where he would not provide any of this kind of information, but we made a list of the different indicators that the chair is watching now, and not only didn't provide that list, things like the quote we had there, which you can say inflation breath, he said he's watching private domestic final purchases, that's another thing he's watching, and then he provided some analysis of that. So it's really hard to say how and if warships move because we really didn't know, but he's met his critics halfway on this contest, and you can kind of say, you know what?