Fed Chair Kevin Warsh Puts the Rally to the Test: The Investment Committee Weighs in 8/28/26

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**Scott Wapner** (1:00)
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**Dominic Chiuin** (1:16)
All right, thanks very much Contessa. Thank you very much Carl. Welcome to the Halftime Report. I'm Dominic Chiuin for Scott Wapner today, front and center this hour. A reality check for the rally as investors react to new commentary from Fed Chairman Kevin Warsh ahead of a seasonally tricky month in the stock market overall. We're gonna debate the road ahead for your money with the Investment Committee. On this Friday, they are Jenny Harrington, Jim Labanthal, Bill Baruch and Kevin Simpson. And by the way, Kevin Simpson, newly minted CNBC contributor, Kevin Simpson. So congratulations to you. And we're gonna get you all of that stuff going on today for the Investment Committee. We're gonna check the markets right now. As Carl and Contessa pointed out, we are relatively calm right now. Dow is higher by a modest one-tenth of 1% or 71 points. The S&P is pretty much flat on the session right now. The tech-heavier NASDAQ trade off by one-quarter of 1%.
And all of this in the wake of Fed Chairman Kevin Warsh's remarks at the Jackson Hole Symposium. You can see right now, two-year note yields ticking higher, 4.325%. The benchmark 10-year note yield currently just a hair below 4.71%.
We did see a little bit of volatility around the initial remarks, only to see the stock markets dip and then recover mightily in the wake of that. You'll see that on the intraday charts, and we're kind of drifting a little bit lower right now. Let's go to the Investment Committee, and Jenny, I'll start with you. You listen to the remarks, there is a focus perhaps on the fact that inflation still remains sticky, and Fed Chairman Kevin Warsh did reiterate a commitment to price stability. Maybe that is the Fed independence narrative that many people in the markets wanted to hear.

**Jenny Harrington** (2:53)
I think that's true, and I also think, which is something I said that last week that ended up being a bit controversial is, I'm not sure it actually matters that much for the stock market.
The reason being is that we started the year at 4.2 percent on the tenure, and here we are at 4.7 as we speak, and what's the market done? Just go up and up and up. So I really think we need to think about, we have to, it's our job, we have to think about industries, we have to think what Warsh is going to do. But if we know that he's going to be quieter, if we know that there's a slight bias to raising and not cutting, and by the way, it's not an overwhelming bias, what is it Kevin, like 55% or what?
55% as of right now? So it's not overwhelming. Then I think from an investment perspective, you kind of say, hey, interest rates might be relatively steady, the Fed isn't going to have a heavy hand on that, and what does that mean for our portfolios? And what I think we do as investors is we continue the playbook of this year, which is looking at earnings.

**Dominic Chiuin** (3:48)
Does that sound right? Given the fundamental backdrop that we've gotten, the bulk of earnings season behind us, there are still some bigger reports yet to come this coming week. But overall, we've cleared the decks, so to speak, on a lot of the bigger picture macro and micro economic catalysts. Not to say that they're not going to be a problem, but they are now known. So how does that set up going into September?