Sarah Hunt joins Bloomberg Surveillance in studio to give the equity read on Kevin Warsh's Jackson Hole speech, and lands somewhere between the hawks and the doves. Tom Keene and Paul Sweeney take her through what the Fed is weaning markets off, whether earnings can carry valuations this high, and what a jump in crude on a Monday morning does to the inflation the Fed is trying to control.
👤 Guest: Sarah Hunt, partner and chief market strategist at Alpine Saxon Woods, in studio with the equity outlook after Jackson Hole
🎙️ Hosts: Tom Keene and Paul Sweeney, who present Bloomberg Surveillance on Bloomberg Radio and Television
📰 Published: 31 August 2026 on YouTube (Bloomberg Podcasts)
🔴 YouTube | 🟢 Spotify | 🟣 Apple Podcasts | 🔗 Episode page | ⏱️ 26 min
Key Takeaways
The era of being talked through every move is over
"I don't think that you're going to get the same kind of consistent talk and handholding that we've had since arguably the financial crisis."
She said Warsh's earlier speeches did not land the way they were meant to, and this one was him redefining the job
Markets will find a substitute signal, because they always have
"Remember, there was a briefcase indicator. There was a sandwich indicator. There were a whole lot of things. He wore a gray tie."
The committee is not close to unanimous on September
"I don't know if they want to wait. I know that there are a couple who don't, but there's still nine that do."
August data has fooled the Fed before: she said the last big panic move came from August numbers that looked less bad by September and October
Earnings are the reason the market does not feel expensive
"I think that that looks pretty benign at the moment. And it has to be, given where valuations are, I think."
Nvidia's read on the environment pushed the debate straight into next year's numbers — "We're already worrying about 2027, right?"
The oil move is a weekend headline, and the tanker traffic behind it is unverifiable
"So because the tensions have escalated and de-escalated a number of times, you've had very much of a roller coaster for the oil prices."
"You know, it's hard for us to see that from the outside because a lot of this is going on in the dark without transponders."
Inflation from food and energy is a consumer problem, and rate rises reach it only through jobs
"The problem is that raising rates doesn't necessarily attack that, except by lowering demand, and then that hurts your employment picture."
Weather in the growing season and fertilizer are both pushing commodity prices, in her account
Warsh Redefined the Job, and the Handholding Is Over
Sweeney opened by asking what she made of the speech.
The earlier speeches missed. The market had expectations of him, she said, and after those earlier speeches, "let's just say they didn't hit the way that I think that they were intended to"
This one was a reset of the terms. She said he did a good job of redefining what his job is, what he wants to do, and the parameters he is looking at
What he is not going to do is the part that matters for markets: "I don't think that you're going to get the same kind of consistent talk and handholding that we've had since arguably the financial crisis."
Keene: He Called It a Trail Map, and Everyone Traded It as Forward Guidance
Keene put it to her that Warsh made a point of saying not to call this forward guidance, then gave a trail map that sounded exactly like it — and asked whether he is weaning markets off the habit.
Her answer was that the habit predates the guidance. Markets are always going to look for information and always trying to parse out what is going to happen
"Remember, there was a briefcase indicator. There was a sandwich indicator. There were a whole lot of things. He wore a gray tie."
Back in the day, she said, people relied on a lot of things besides speeches
The inflation credibility problem is what he is answering. "And I think that there was some concern post the first two that there was not an attack on inflation.", and she said he is trying very hard to make that case
Adding variables buys the Fed time. By widening what he is watching, she said, he makes it possible to say let us see what happens with the data coming in now
August is the month that has fooled them before. August has traditionally been up and down, and she said the last big Fed panic move came from August data that later disappeared and was not so bad by September and October
The committee is split, and the majority is patient. If there is no huge change in the data, or the data is mildly benign, she said it gives them room to wait a little longer
"I don't know if they want to wait. I know that there are a couple who don't, but there's still nine that do."
Why the Market Does Not Feel Expensive: Earnings, Nvidia, and 2027
The hosts put to her that earnings have been better than good, particularly in the second quarter, and asked whether that is enough to support the market — because it does not feel that expensive.
Her answer was that earnings are doing all the work. Absent that growth, she said, there would be much more trouble digesting everything else going on, oil prices included
What she took from last week and from Nvidia was a forward signal: a strong environment going forward, and no sign of it backing down the way people have been concerned it might
The argument has already moved a year out. "We're already worrying about 2027, right?" — because it is nearly September, which is when the market shifts to next year's earnings
The strength is not confined to technology. She said good earnings are showing on other fronts as well, with pretty strong cash flow — the technology companies are spending it, and a lot of other companies are using it in different ways
"I think that that looks pretty benign at the moment. And it has to be, given where valuations are, I think."
Oil: A Weekend Escalation, and Ships Nobody Can See
Keene noted the escalating tensions and the oil move; Sweeney said he had just seen it and "Boy, they're up big." They asked how she factors it in.
The pattern is not a trend. "So because the tensions have escalated and de-escalated a number of times, you've had very much of a roller coaster for the oil prices.", and she said it has been higher, then lower, then higher rather than a straight line
This move is a weekend move. It follows what happened over the weekend and the concern that a hostility situation is back, and she said the fact that there was kinetic action makes people much more concerned
"I don't know that that's going to happen. I don't think anybody knows yet." — the plan is not going to be announced, and the market will find out by watching
A calm week takes it back down. If it does not repeat, she said, oil prices calm down again
The supply question cannot be checked. There was discussion over the weekend of how much Saudi Arabian crude got through — "You know, it's hard for us to see that from the outside because a lot of this is going on in the dark without transponders.", and she said that opacity took the oil price down last time
Sweeney read the screen back: "But, boy, WTI crude oil is up 3.8%, $3.17 a barrel, now at $86.57 a barrel for WTI.", with Brent at $91.18
The Inflation That Rate Rises Cannot Reach
Sweeney asked what that does to underlying inflation and to corporate earnings.
The burden falls on households, not companies. She said the biggest problem for inflation right now is probably more for consumers than for corporations, and that it depends on the sector
"Because if transportation costs are a large part of what your cost basis is, if you're an airline, this is a problem.", and less of one in other sectors
Food and energy are where consumers take the hit, she said, and the transportation issue has been up and down
Two supply stories are pushing commodity prices, on her account: issues with the growing season because of weather, and issues because of fertilizer
The policy tool does not fit the problem. "The problem is that raising rates doesn't necessarily attack that, except by lowering demand, and then that hurts your employment picture."
That tension is why she reads September the way she does: with a lot of puts and takes, she said the Fed is not necessarily as much on target to do something in September, because she thinks they see it too
Hunt's bottom line is that the Fed has stopped explaining itself at exactly the moment its inflation problem is coming from food, fuel and fertilizer — the part of the price level a rate rise can only reach by putting people out of work.
Products, Companies & Tools Mentioned
Nvidia (What she took from its results: a strong environment going forward, and no sign of the spending backing down the way people feared)
Alpine Saxon Woods (Her firm, where she is a partner and chief market strategist)
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