Fed policy, inflation and the AI trade are taking center stage as markets digest Kevin Warsh’s latest comments from Jackson Hole. Joining J.D. Durkin is Eric Criscuolo, Market Strategist at the New York Stock Exchange, who breaks down why Warsh’s focus on bringing PCE inflation back to the 2% target came across as notably hawkish. With two year Treasury yields moving higher, markets are reassessing the path for interest rates and what it could mean for risk assets.
Criscuolo also weighs in on NVIDIA’s latest blockbuster earnings and why the AI trade continues to run hot. NVIDIA is forecasting another major jump in revenue, with demand for AI infrastructure showing little sign of slowing. But rising memory costs, pressure on gross margins and the enormous amount of capital required to fund AI infrastructure remain important risks for investors to watch.
Looking ahead, September could bring a different market environment. With the VIX trading below 15 and historically higher volatility often seen in September, Criscuolo says investors should pay close attention to any sudden shift in market positioning. Sector flows, AI leadership, healthcare, financials and the approaching U.S. midterm elections could all add new layers of uncertainty as investors head into the second half of the year.