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This is a clear and powerful speech that, in my opinion, meets the high expectations for Kevin Warsh’s first Jackson Hole presentation as Federal Reserve Chair; and this notwithstanding the unusually wide range of expectations leading up to it. His remarks address directly and effectively the loud calls from some market participants and economists for his views on the current state of the economy, the balance of risks to the Fed’s dual mandate, and his commitment to the inflation target. These are the issues that will most likely dominate media headlines. Crucially, however, Chair Warsh also details why the practice of forward guidance has "outlived its role," warned against the risk of the "hall of mirrors," and explored the longer-term structural questions facing the economy and policy effectiveness. This includes framing AI as a "new factor of production" that opens up "major lines of inquiry." While this second set of issues may well attract less immediate media attention, it is by far the most interesting and consequential portion of his speech. #economy #markets #federalreserve