Warsh’s Jackson Hole stance signals Fed independence as Rogoff warns of political backlash

Fed Chair Kevin Warsh used his Jackson Hole speech to draw a clear line against inflation and hint at a rate hike if the data doesn’t improve, a stance Harvard economist Ken Rogoff says reinforces Fed independence even amid political pressure. Rogoff noted that a September move could trigger backlash from Trump, yet market odds for a rate hike rose to about 60% after the speech. The former IMF chief economist criticized Treasury Secretary Bessent’s current strategy and reiterated that policy decisions will depend on inflation data, with longer-term yields likely to rise as structural forces and higher military spending expectations push rates higher over time.