Markets are drifting lower into the Fed's Jackson Hole meeting on August 27, and the risk is that Warsh sounds tougher on inflation than investors expect — bad short term, but a possible chance to buy.

• Almost everyone expects Warsh to do nothing and say the bond market is already doing his job for him.
• That leaves a hawkish surprise as the only real shock left, since a dovish one is already priced in.
• Money is easy to borrow right now — the loosest in years — which makes it awkward for Warsh to claim policy is tight.
• The Iran conflict is pushing oil back toward its recent highs, and that feeds straight into inflation and higher borrowing costs.
• Higher rates also hurt the AI trade, because the big tech firms building data centers are about to burn cash and need to borrow.

Outlook: Expect a choppy, more volatile stretch into the speech, with any dip likely a buying opportunity ahead of a slow grind higher for the rest of the year.