Warsh finally gives markets much needed clarity

Kevin Warsh’s Jackson Hole speech went a long way, in our view, towards restoring some much-needed credibility to the Federal Reserve’s (Fed’s) reaction function and its commitment to the dual mandate.

US investment grade (IG) borrowers printed close to $150bn in August, surpassing the $136bn record set in August 2020 and making this the third consecutive month to set an all-time high after June and July.

A series of recent developments has put US life insurers with significant private-credit linkages under greater regulatory and investor scrutiny. While we believe this could create pressure for some US names, we see limited evidence that the concerns are spilling over into European life insurers.

The US Treasury Department surprised markets yesterday afternoon by announcing an increase in its buyback operations, which will “at least double” to $4bn, from 9 September to 4 November.

The last couple of weeks have been busy on the GDP front with a few countries reporting Q2 growth numbers.

As we approach the end of the reporting season for European financials, including banks and insurers, Q2 2026 has proven to be another strong quarter, with most reported earnings coming in ahead of consensus and several banks upgrading their already ambitious profitability guidance for the year.

The latest Federal Open Market Committee (FOMC) meeting left a strange taste on investors' mouths. In our view, Chair Kevin Warsh failed to clarify the Federal Reserve’s (Fed's) reaction function and the central bank’s views on the current economic picture and relating to monetary policy.

Federal Reserve (Fed) Chair Kevin Warsh hosted his second Federal Open Market Committee (FOMC) meeting this week, with most people, including ourselves, expecting a hawkish hold.

Data centres are becoming increasingly important in credit markets, as accelerating artificial intelligence (AI) adoption and continued growth in demand for cloud solutions drive significant capital expenditure (capex) needs.