Market Briefing For Monday, Aug. 31, 2026

A 'scent' of humor - reflected in the Fed Chairman's referencing 'hiking' at the Jackson Hole conference; before he actually hobnobbed in the rain with the head of the Bank of England and others. Notably said very little otherwise.

Of course he was referring to the 'mountain trails' hiking; whether a literal or clever monetary policy hint.. although he referred to achieving the low inflation goals; and blamed the Fed (appropriate to a degree) for years of rising prices.

Warsh gave his first Jackson Hole speech as Fed Chair this weekend, titled "In Our Time." Most of it was about inflation. PCE is running 3.7% over 12 months and 4.1% over 6 months, and he noted that 54% of PCE components are rising faster than 3% a year. He said the Fed's predominant focus right now should be on prices, and that the committee needs confidence inflation is moving to target clearly and at sufficient speed. He also changed how the Fed will talk. He said forward guidance as a regular practice has overstayed its welcome and should be limited and circumscribed in normal times, and he rejected following a mechanical reaction function like a Taylor rule. He described what he wants as 'a quieter Fed'.

Perhaps the 'real' story on Friday (aside sloppy behavior in stocks like Ondas which had to deal with large open interest Call options expiring today with the 8, 8.50 and 9 strikes being fairly sizeable for just a weekly Expiration).. and a concerted effort by option writers restrained the shares to close just under 8; so any Call expiring today were worthless at those strikes. Expect rebound to start virtually immediately I would think; since this was artificially suppressed.

So, today that 'real' story was Venezuela; with Washington pressing them to withdraw from OPEC, and yes, that makes lots of sense for multiple reasons.

Leaving OPEC also aligns with what I discussed the other day: 'The Plan' is a combination of financial, military, and political moves that tactically aim to put The United States in virtual control of most Oil conduits around the globe. For example, aside the new U.S. dominance in parts of Latin America, this opens more flow of Oil 'out' of Venezuela without it even remotely tied to whatever a stressed OPEC group decides over in Saudi Arabia primarily; and provides a modicum of additional leverage to Washington.

That's fine; we're still in an era of petroleum-dependence. And I'm not in the 'global warming be dammed' older-era crowd; just viewing what's happening pragmatically.. in fact my (French Foreign Ministry) cousin, besides fairly key posts in South Africa, Haiti and at the United Nations Security Council, was a co-author/participant writing the original Paris Climate Accord. So, while I tend to concur about 'climate change' as problematic; I understand what leaders of our societies have determined (even if I disagree). And that gives more power to the USA in my view; both with Oil and Natural Gas / LNG as well. Today's news about Venezuela intending to leave OPEC, fits neatly into the U.S. plan.

Ultimately that's how you get consumer prices down if all else (like ending war with Iran) fails to materialize sooner. And bringing Oil & Gas prices down will immediately break the inflationary situation and blunt Chairman Warsh efforts (if he intends) to hike rates; because inflation will be easing organically if so.

Market X-ray: the Fed Chair 'is' very concerned about inflation; using PCE as a key measure. So we have more clarity; but not surprising as to any forward guidance. True there's so little progress to getting to the 2% target; therefore it seemed hawkish. But that omits the influence of Oil; so that's why we see the Venezuelan 'OPEC detachment' move as somewhat of a back-up to tame the consumer inflationary pressures; if the Iran War doesn't end soon.

Stormy weekend and presumed calm for markets after an erratic start to the new week likely. As to the Fed it's pretty clear that Chairman Warsh would be more comfortable 'not' hiking rates if higher Oil prices would take a hike; or other news to reinforce the concept of price de-escalation. Obviously the Fed can't just use linear thinking like some pundits and must be aware that hiking rates will have no impact on domestic inflation at all; since this is supply-pushed not demand-pulled. Hence if they're thinking, they realize all they will do is increase everyone's expenses even more.