Global Forex and Fixed Income Roundup: Market Talk -2-

0534 GMT - Federal Reserve Chairman Kevin Warsh is likely to argue for reducing the Fed's use of forward guidance, which he views as a source of past policy mistakes, Barclays rates strategists say in a note. At the Kansas City Fed's annual symposium at Jackson Hole between Aug. 27 and Aug. 29, Warsh may also provide insights on balance sheet policy, they say. They also expect Warsh to emphasize long-run drivers of the economy, particularly productivity trends and their effects on potential growth. Warsh is unlikely to provide near-term policy guidance, but markets will look for clarity on how the FOMC intends to return inflation to the 2% goal, the strategists say. Warsh is more likely than not to affirm that rate hikes are possible if inflation fails to improve. (emese.bartha@wsj.com)

0534 GMT - The U.S. Dollar Index remained heavy near 98.8 points in Asia, says Samara Hammoud, foreign-exchange strategist at CBA. Concerns about U.S. fiscal dominance, the sustainability of government debt, and U.S. dollar debasement appear set to continue to weigh on the currency this week, she adds. Treasury Secretary Scott Bessent has raised expectations that a budget consolidation program will be released this week. However, the poor experience with DOGE, the Department of Government Efficiency, in 2025 illustrates how difficult it is to rein in government spending or raise taxes, Hammoud adds. A modest consolidation would disappoint market expectations and further weigh on the U.S. dollar, she says. (james.glynn@wsj.com; @JamesGlynnWSJ)

(END) Dow Jones Newswires

August 24, 2026 04:11 ET (08:11 GMT)