Why Morgan Stanley Is Keeping An Eye On The Fed's Balance Sheet After Warsh's Jackson Hole Speech

By Seth Carpenter, chief global economist at Morgan Stanley

The Fed’s Jackson Hole conference has a reputation for making news. In years past, the Fed Chair has on occasion delivered big reveals about the future course of monetary policy and its tools in ways that have moved markets. On Friday, we heard from Chair Warsh in the mountains of Wyoming, and after he reinforced the FOMC’s commitment to 2% inflation, markets reacted by pricing in more policy rate hikes.