New Fed chair faces critical test at Jackson Hole as inflation fears mount

Investors will hope Kevin Warsh offers ‘comfort blanket’ at annual meeting of central banks amid bond market anxiety The new US Federal Reserve chair, Kevin Warsh, faces a critical test this week amid anxiety in government bond markets over inflation and Donald Trump’s tax and spending plans. As the world’s most powerful central bank prepares for its annual Jackson Hole conference, analysts said bond traders would be looking for signals from Warsh over its commitment to fighting inflation. The Trump-appointed head of the US central bank has previously signalled reluctance to “spoon-feed” financial markets over how it plans to set interest rates to keep fast-rising prices in check. However, anxiety over Trump’s handling of the economy and investor fears that his war with Iran is stoking inflation have rocked global financial markets amid a dramatic sell-off in US government bonds . Instead, he has said his Jackson Hole speech could be “focused on bigger questions”, including concerns over productivity and demographics.

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