Fed Rate Hike September 2026: Is Warsh's Inflation Warning a Game-Changer?

**SPEAKER_1** (0:01)
This is InvestTalk from KPP Financial, helping investors make sense of the markets one day at a time. Here's your host, Luke Guerrero.

**Luke Guerrero** (0:16)
Good afternoon, fellow investors, and welcome back to InvestTalk. I'm your host, Luke Guerrero, and I'll be with you on this beautiful Thursday, September 3rd, 2026 Now, we all understand there's lots of moving parts to markets, to financial news, and understandably you might have several new finance and investment questions. Luckily for you, we offer many ways for you to submit those questions via web form on our website, over on YouTube, or by calling in live to this show, or on our anytime voiceline.
So, before we talk about today's market performance and run down those show topics, let's tackle a caller question now.

**SPEAKER_3** (1:05)
Hey everyone, long time listener here. I want to get your thoughts on a very small satellite position I have. PLGO, a very small SMIDCAP insurance company.
All right, thanks a lot.

**Luke Guerrero** (1:18)
Let's pull up ticker PLGO, which is Pelagos Insurance Capital Limited. I wouldn't call it a SMIDCAP. It is firmly in the SMALLCAP space. It's a $2 billion market cap company. That's about as dead in the range as SMALLCAP as one could possibly be. Started trading back in 2023 Year to date, it's up 30%, up 21% over the past three months, up 47% over the past 52 weeks. Now, what they are is a Bermuda-based specialty insurance and reinsurance company. So think cyber, energy, political risk, marine, and then the reinsurance, your property, your whole account segments. Now, taking a look at this business, looks like revenue was down year over year, so it did beat estimates down at 7.3%. Earnings per share, though, up pretty sharply from a loss just one year ago. And in 2026, projected to grow yet again, earnings per share from 211 to about $3. So pretty solid growth on that front. Now, they don't give any formal guidance. They did forecast revenue growth on 8 to 9% over the next four years. That's well ahead the 2.5% industry average. I think a lot of what has to do with this stock's positive performance and outperforming its industry over the past couple years really is related to that growth. And from a price-to-earnings perspective, I mean, it's trading at, or price-to-book, it's trading at .9, price-to-book. Let alone it's average of .8, but it is a bit of a deep value name here. In an area, in a space that, given the current macro environment, no insurance stands to do pretty well.
They recently rebranded, I think, from what I can see here.
If you go past the headlines, I think one concern I have is related to free cash flow. So cash flow is actually headed in the wrong direction here. Does that mean it's cheap for a reason? Maybe. But as a satellite position, it's got strong momentum and certainly has strong earnings growth as well. So I don't mind it as a small satellite position. That's a small cap insurance company, ticker PLGO. We had a great show yesterday. We looked into whether India, specifically the Indian stock market is a smart bet this year, and then really dove into the juxtaposition of record Forex reserves and a growth gap that we've been seeing for quite some time. We also answered a listener question on ticker GEV, which is GE Vernova, Inc. If you happened to miss yesterday's episode, I encourage you to check it out to hear all about India and GEV. Remember, the best way to never miss an episode of InvestTalk is to subscribe wherever you get your podcasts. Now onto today, because we have a packed show for you yet again. My main focus point is about the Fed quote rate hike September 2026
This is the warning we saw last Friday in Jackson Hole. A bit of a game changer for the movement in rates. As I mentioned previously on a previous show, Federal Reserve Chair Kevin Warsh rocked markets at Jackson Hole by declaring that inflation is not slowing and reaffirming a commitment to hitting the 2% target. So, we'll dive into that, what it means for stocks, what it means for bonds and what it means for your wallets.
We also have a couple other stories to bring you today, including one on the trade deficit, which has widened despite 18 months of aggressive tariffs.
Another on corn contracts and food inflation. Should we have time at the end of the show, we'll talk a little bit about the 23 hour trading day and what it might mean for you. We also have some Voice Bank calls ready to play, including one on alternatives to money market accounts and HDFC Bank Limited.