Dollar Holds Gains on Hawkish Warsh Remarks

2026-08-31 01:30 By Jam Kaimo Samonte 1 min. read

The dollar index traded around 99.6 on Monday after rising sharply in the previous session, as hawkish remarks from Federal Reserve Chair Kevin Warsh led traders to increase bets on an imminent interest rate hike.

In his Jackson Hole address on Friday, Warsh warned that inflation is not slowing meaningfully and reaffirmed that policymakers remain committed to returning inflation to their 2% target.

Markets are now pricing in around a 57% chance that the Fed will raise rates by 25 basis points in September, up sharply from about 40% a week ago.

A surprise upward revision to the University of Michigan’s consumer sentiment index also provided support for the dollar.

Investors now turn their attention to Friday’s August jobs report for greater clarity on the outlook for US monetary policy.

Elsewhere, oil prices jumped after the US military targeted Iranian rocket launchers preparing to deploy mines into the Strait of Hormuz, boosting safe-haven demand for the greenback.



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Dollar Holds Gains on Hawkish Warsh Remarks
The dollar index traded around 99.6 on Monday after rising sharply in the previous session, as hawkish remarks from Federal Reserve Chair Kevin Warsh led traders to increase bets on an imminent interest rate hike. In his Jackson Hole address on Friday, Warsh warned that inflation is not slowing meaningfully and reaffirmed that policymakers remain committed to returning inflation to their 2% target. Markets are now pricing in around a 57% chance that the Fed will raise rates by 25 basis points in September, up sharply from about 40% a week ago. A surprise upward revision to the University of Michigan’s consumer sentiment index also provided support for the dollar. Investors now turn their attention to Friday’s August jobs report for greater clarity on the outlook for US monetary policy. Elsewhere, oil prices jumped after the US military targeted Iranian rocket launchers preparing to deploy mines into the Strait of Hormuz, boosting safe-haven demand for the greenback.
2026-08-31
US Dollar Extends Rebound
The US dollar index rose to 99.5 on Friday, extending the rebound from the three-month low of 98.8 from August 21st, and tracking the surge in short-term Treasury yields after Fed Chairman Kevin Warsh signaled a firmer stance against inflation. The Fed Chairman stated that underlying inflation was not significantly lower in the last few months and added that the labor market appears to be at full employment. On top of that, Warsh stated that the Fed is tracking the PCE index as an inflation gauge, using stricter rhetoric than earlier suggestions that one of the newly created task forces could shift the Fed's target gauge. Rate futures reflected a swing to positions of a Fed rate hike next month. Also strengthening the dollar, annual revisions to nonfarm payrolls were well under recent amounts, indicating robust employment. In the meantime, signs of higher inflation in the Eurozone added to the consensus of an ECB rate hike, limiting the rebound for the DXY.
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Dollar Holds Steady Ahead of Warsh Speech
The dollar index was little changed around 99.1 on Friday as investors awaited Federal Reserve Chair Kevin Warsh’s speech at the annual Jackson Hole symposium later in the global day for clues about the outlook for US interest rates. Still, the greenback was on track to end the week slightly higher as a hotter-than-expected US inflation this week reading supported expectations for a Fed rate increase before year-end, with the probability of a hike by December remaining above 70%. For the upcoming September meeting, markets are currently pricing in around a 65% chance that the Fed will keep rates unchanged. Meanwhile, Kansas City Fed President Jeff Schmid said monetary policy is not restraining the economy. Elsewhere, investors continued to assess the implications of the US Treasury’s expanded debt buyback program, which heightened concerns about the risks of a US debt crisis and potential dollar weakness.
2026-08-28