The Jackson Hole symposium dominated the week. In his first speech there as Federal Reserve chairman, Kevin Warsh warned on Friday that inflation remains too high and that the better-than-expected readings from the summer do not indicate to him that underlying trends have improved significantly. He described financial conditions as not broadly restrictive—a shift from his July remarks—and left the door open to a rate hike if prices do not ease, though he avoided committing to future guidance or a reaction function. The bond market reacted immediately by pricing in a rate hike: traders began assigning a nearly 60% probability to a September hike, while several economists expect the move to occur between October and December. The data supported this message. The July PCE price index, released on Wednesday, rose 3.7% year-over-year—unchanged from June and above the expected 3.6%—with a monthly increase of 0.2%. Core PCE remained at 3.3% annually and 0.2% monthly. The Bureau of Economic Analysis (BEA) left second-quarter GDP unchanged at an annualized 1.5%. The Conference Board’s consumer confidence index fell to 89.4 in August from 90.2, with the expectations sub-index plummeting to 68.2, and the University of Michigan’s sentiment index declined by nearly 8% over the month. Initial jobless claims fell to 203,000 for the week ending August 22.

On the corporate front, Nvidia was once again the story of the week: it reported record revenue of $96.2 billion in its second fiscal quarter, a 106% year-over-year increase, with $89 billion coming from the data center segment and adjusted earnings of $2.22 per share. The guidance of $108 billion for the current quarter—which excludes data center sales to China—far exceeded the projected $104.2 billion; the company estimated that capital spending by the five largest hyperscalers will rise from US$ 800,000 million this year to US$ 1.3 trillion in 2027 and announced that Amazon Web Services will purchase two million GPUs.