Fed Chair Kevin Warsh delivered a hawkish speech at Jackson Hole, prioritizing inflation control and expressing confidence that underlying inflation is moving towards the Fed's objective. He stated that financial conditions are not currently restrictive, setting a high bar for policy changes. Warsh also indicated he would not pre-commit to a September rate hike, causing mixed market reactions. Gold prices dropped, while bonds and Bitcoin remained flat, and stocks initially jumped on dovish interpretations of his comments. The yield curve significantly flattened following his remarks. Warsh discussed artificial intelligence as a potential driver of substantially higher growth, posing questions about its impact on productivity and labor. He reiterated his opposition to regular forward guidance, viewing it as an outdated crisis-era tool. Warsh advocated for markets to form their own views based on real data, rather than relying on Fed guidance. He outlined seven principles for monetary policy, emphasizing timely data, a firm 2% inflation target, and using the policy rate as the primary tool. Warsh assessed the current economy as having solid output and labor, with strong capital expenditures and rising profits. However, he highlighted that inflation remains a significant problem, with 12-month PCE at 3.7% and 6-month at 4.1%. Medium-term inflation expectations are currently anchored, but he warned they can change rapidly. Warsh accepted institutional responsibility for sustained elevated inflation. He concluded by stating his commitment to discipline rather than a specific decision, implying a readiness to act if inflation does not move decisively towards the target.