Warsh heads into Jackson Hole hot seat

A look at the day ahead in European and global markets from Rae Wee

All eyes are on a speech from the world's most powerful central banker later on Friday, with investors focused on what Federal Reserve Chair Kevin Warsh says about inflation and, specifically, how he intends to get it back down to target.

It's likely he could underwhelm expectations, given Warsh's reluctance in providing forward guidance, but at the very least markets will be hoping for a clearer reconciliation between recent policy decisions and the hawkish inflation rhetoric.

While a steep selloff in U.S. Treasuries has abated for now, yields remain well above their levels at the start of the year, partly reflecting investors' doubts about the Fed's ability to keep inflation in check.

Markets turned cautious ahead of the speech, with U.S. futures dipping lower while European futures nudged higher.

• Fed Chair Kevin Warsh's speech in Jackson Hole

• German import prices (July)

• French preliminary inflation data (August)

It isn't just the Fed that has a credibility issue. The U.S. Treasury Department does too.

Treasury Secretary Scott Bessent and Warsh appear at odds over a question at the heart of U.S. financial policy. How hands-off can policymakers be when it comes to setting a price for money?