Warsh puts prices first, and the bond market takes him at his word

A debut spent on prices

Kevin Warsh's first Jackson Hole speech as Federal Reserve chairman was reported everywhere in much the same terms. He expressed concern about inflation, said the central bank had "work to do" if price rises did not ease for Americans, and argued that delivering stable prices is the central bank's job. CNBC noted that he also made the case for a "quieter" central bank, a phrase that carries its own implications for how much the Fed says and how often.

Sky News read the remarks as a clear signal that the next move in US rates could be upwards. The BBC and the Guardian both led on the same "work to do" formulation, and on the persistence of inflation rather than on any timetable.

He was not speaking into a vacuum. The day before, Cleveland Fed president Beth Hammack had told CNBC that "now is the time to act" on raising interest rates, which is about as direct as a regional president gets in the week before the chair speaks.

City A.M.'s live blog had carried the "work to do" line early in the session, before the full text landed. By the close, the WSJ was reporting that Warsh's comments had boosted rate-hike bets outright. Whatever the eventual decision, the framing of the debate on Friday was about the direction of the next increase rather than the timing of the next reduction, which is not where the conversation sat for much of the past two years.

Yields up, most other things down

Short-term Treasury yields rose as Warsh spoke, the WSJ reported, with global bond yields having already moved higher ahead of the speech and the ten-year Bund yield touching a fifteen-year high.

US stocks fell. The WSJ ran two pieces on the point, one during the session attributing the decline to rate-hike bets and one after the close attributing it to the rise in bond yields. Both descriptions amount to the same mechanism working through the day.

The dollar rose as Warsh acknowledged inflation risk. Gold settled lower on the same concerns, having spent the earlier part of the session waiting on Jackson Hole. Asian currencies, by the WSJ's account, had simply consolidated before the speech rather than taking a view.

London went the other way. City A.M. reported the FTSE 100 jumping as oil fell back, with the oil move following a US statement that there would be no negotiations with Iran. Iran also featured elsewhere in Friday's coverage: the WSJ described a core Egyptian bank caught up in the Treasury's Iran crackdown, a reminder of how sanctions enforcement reaches institutions well outside the target country.

On the opinion pages, the WSJ argued under the headline "Gag Treasury, You Gag the Market, Too" that restricting what the Treasury says has consequences for markets. Placed alongside Warsh's own call for a quieter central bank, the week produced two rather different arguments about official silence.

Companies, funds and the taxman

BYD reported a second-quarter profit of US$1.2bn, which the South China Morning Post attributed to surging global demand. Bank of China (Hong Kong) posted higher profit, with lower credit costs offsetting pressure on margins. Also in Hong Kong, a SoftBank-backed US surgical robotics company is looking at a listing there to fund a push into mainland China.

In venture capital, Andreessen Horowitz launched a hardware vehicle it calls the "Machine Age" fund, aimed at supply bottlenecks in artificial intelligence. Closer to home, City A.M. reported that venture heavyweights had denounced the government's plans for a £1bn scale-up fund. The complaint was made by people who invest in exactly the companies the fund is meant to reach.

Two food stories. Colman's Mustard has been put up for sale ahead of a merger, per the BBC. And Sky News reported that a Nestlé-backed pizza producer has bid for Crosta Mollica, the Italian flatbread and pizza brand.

Finally, a number from HMRC by way of This is Money: more than 200 British crypto investors are now millionaires as far as the tax authorities are concerned. The figure comes from the taxman's own records rather than from any exchange or survey.