Federal Reserve Chair Kevin Warsh's inaugural keynote address at the Jackson Hole Economic Policy Symposium has emerged as the day's main event, with markets closely watching for clarity on the Fed's reaction function. According to Reuters, Warsh has not yet given any forward guidance regarding the path of interest rates, though three Fed officials already warned against sticky inflation. However, Warsh's latest comments at Jackson Hole put inflation back at the center of the policy debate, raising concerns about potential tighter financial conditions ahead. As reported by The Economic Times, Warsh said inflation numbers in the US were more concerning and added that he would be hard pressed to describe broad financial conditions as restrictive, remarks that markets could read as a signal that the Fed may not be done fighting inflation. He also said the Fed would have work to do if policymakers were not confident that inflation was moving back to its 2% target, reinforcing the hawkish tone. The 30-year Treasury yield rose 1 basis point on Friday to 5.20%, though it was still down 8 basis points for the week, while the 10-year yield fell 6 basis points to 4.68%. On Friday, the bond market reacted more sharply than equities after Warsh's prepared remarks were released, with yields moving in the minutes after the speech, according to The Economic Times.
Market experts are now expecting a flat-to-negative start for the Indian stock market on Monday following Warsh's hawkish stance. According to Mint, Anuj Gupta, a SEBI-registered market expert, said Kevin Warsh's Jackson Hole speech will put pressure on the global equities, including the Indian stock market. The key benchmark indices — Nifty 50, Sensex and the Bank Nifty — may try to test their current support in the near term. Speaking on the impact of Warsh's speech on global markets, Philip Straehl, Chief Investment Officer at Morningstar Wealth, told Reuters that smaller companies and technology stocks are more sensitive to rising interest rates. Osho Krishan, Chief Manager — Technical & Derivative Research at Angel One, advised investors to refrain from taking aggressive bets and instead focus on selective opportunities within the broader market. The 24,200 Nifty level remains crucial for sentiment stabilization, with the biggest near-term challenge remaining the combination of weak market breadth, foreign selling, elevated crude prices and pressure on heavyweight stocks. Ponmudi R, CEO - Enrich Money, noted that the coming weeks are likely to remain driven by global monetary-policy expectations, crude oil movements and developments surrounding the Strait of Hormuz, with US monetary policy now the dominant global catalyst following Fed Chair Kevin Warsh's hawkish remarks.
Bets for a 25 bps interest rate hike at the September US Fed meeting received a significant boost following Warsh's Jackson Hole speech. According to Reuters, after Kevin Warsh's Jackson Hole speech, bets that rates would be raised at the September meeting rose to a 55.7% probability from 35.4% on Thursday, as per CME Group's FedWatch tool. Market observers are now expecting an interest rate hike at the US Fed meeting in September 2026, with Warsh's comments signaling a hawkish stance on monetary policy. The immediate risk is not just the Fed's next move but what the speech does to the dollar, US bond yields, crude oil and foreign flows, creating additional pressure on emerging markets like India. A more hawkish Fed usually makes emerging markets less attractive in the short run as global money shifts towards dollar assets, creating pressure on foreign institutional flows into Indian markets. According to Mishra, the outcome could significantly influence expectations regarding the Federal Reserve's September policy decision, the US dollar, Treasury yields and emerging-market fund flows.
India's Q1 FY27 GDP figures are due on August 31, with economists anticipating a slowdown in growth from the 7.8% recorded in the previous quarter. As per Mint, the upcoming week is likely to be packed with key events, with domestic GDP figures and major global economic data expected to influence market sentiment. Ponmudi noted that first-quarter GDP data will be another important factor for broader risk sentiment, offering greater clarity on the pace of domestic growth against a backdrop of elevated energy prices and an unresolved Middle East conflict that has disrupted global supply lines and contributed to higher commodity prices. Ajit Mishra – SVP, Research, Religare Broking, recommended investors to maintain a selective approach and focus on companies with strong earnings visibility, healthy balance sheets, sustainable cash flows and resilient business outlooks. Amid current volatility, investors should avoid aggressively chasing prices and instead use meaningful declines to gradually accumulate fundamentally strong companies.
The underlying trend of Nifty remains range-bound (24,400-24,000) with positive bias, according to market analysts. Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, said any sustainable bounce from near the lower range could trigger a sizable move towards the 24,300-24,400 levels in the near term. Important supports for trend reversal are placed at 24,000, with the 24,200 Nifty level remaining crucial for sentiment stabilization. Hitesh Tailor, Technical Research Analyst at Choice Equity Broking, said the Sensex remains sideways to mildly positive, as the index continues to hold above the rising trendline and is attempting to stabilise around the 50-Day EMA. Sustained trading above 77,680–78,000 could strengthen the recovery and open the way for further upside, while a break below 76,800 would weaken the structure. The Bank Nifty is showing signs of consolidation with 57,000 being watched as a key support level, while Om Mehra, Technical Research Analyst at SAMCO Securities, said the immediate support is placed at 57,200, followed by 57,100. Dr. Ravi Singh from Master Capital Services Ltd noted that the immediate horizontal support is placed at 24,000, and a sustained breach below this level could trigger further weakness towards 23,800, while 24,400 remains a key resistance zone.
Kevin Warsh's speech has fueled speculation for a 25 BPS US Fed rate hike in its September meeting, leading to sharp rise in short-term US bonds and the US dollar, putting pressure on other assets such as gold, silver, bitcoin, and equities. According to Mint, Anuj Gupta said the outlook for gold rate today is flat-to-negative, with the COMEX gold rate having immediate support at $4,450, followed by $4,380. On the upper side, the precious metal is facing resistance in the international market at $4550 and $4620 per ounce levels. For MCX gold, the precious metal has immediate support placed at ₹1,52,000 and ₹1,48,000, whereas the precious metal is facing resistance at ₹1,58,000 and ₹1,62,000 per 10 gm. Silver prices are also expected to face continued pressure, with COMEX silver rate having support at $64/oz and $62/oz, while it faces resistance at $69/oz and $71/oz. MCX silver rate has immediate support placed at ₹2,37,000 per kg and ₹2,33,000 per kg, while the precious white metal has resistances at ₹2,48,000 per kg and ₹2,53,000 per kg levels.
