According to CoinMeta and Investment Live Center, Federal Reserve Chairman Kevin Warsh’s hawkish remarks at Jackson Hole increased the implied probability of a rate hike in September from 35% the previous day to around 58%. The yield on short-term government bonds rose more than that on long-term bonds, reflecting the recent direct link between the Fed’s expectations and the front end of the yield curve. Stocks, which are closely related to the domestic economy, performed poorly, with small-cap and industrial stocks leading the decline, indicating that the market is pricing in tighter policies as there are signs of slowing consumer spending. Warsh’s remarks also pose a challenge to the recently stable long-term yields following the Treasury Department’s repurchase announcements, as a more hawkish Fed reduces the factors that tend to push down these yields. With low trading volume during the summer and three weeks remaining before the Fed’s decision-making, market positioning may remain volatile until the meeting on September 16.