Skip to navigationSkip to main contentSkip to right columnADVERTISEMENTBy Sinéad Carew and Alun JohnFri, August 28, 2026 at 11:15 PM GMT+2 3 min readBy Sinéad Carew and Alun JohnNEW YORK/LONDON Aug 28 (Reuters) - MSCI's global equities gauge fell in a choppy session on Friday, while short-dated U.S. Treasury yields climbed with the dollar as traders added to bets for an interest rate hike after a speech by Federal Reserve Chair Kevin Warsh.Warsh said, at the Fed's annual economic symposium in Jackson Hole, that the U.S. central bank will "have work to do" if policymakers are not confident that underlying inflation is returning to its 2% target, in remarks that acknowledged financial conditions do not appear restrictive.After the comments, bets that rates would be raised at the September meeting rose to a 55.7% probability from 35.4% on Thursday, according to CME Group's FedWatch tool. Three Fed officials have already warned about sticky inflation, but Warsh had previously resisted giving forward guidance on the path of interest rates."He had to come out and say something about the policy outlook, reiterating the Fed's intent to control inflation, reinforcing the Fed's inflation-fighting credentials," said Gary Schlossberg, global strategist at Wells Fargo Investment Institute."He threw a lot of dots out there and when you connect them, in effect, that's what he was saying. Unless inflation rolls over, and we don't expect it to. If anything, the pressure may build a bit over the next 6 to 8 months. He didn't come right out and say it, but all the ingredients seem to be there at this point for at least one rate increase, if not more, going forward."Among Wall Street indexes, the Dow Jones Industrial Average fell 9.45 points, or 0.02%, to 53,559.99; the S&P 500 fell 19.23 points, or 0.25%, to 7,711.76 and the Nasdaq Composite fell 138.93 points, or 0.52%, to 26,402.42.The Russell 2000 index underperformed with a 1.4% loss on the day along with the technology sector.Philip Straehl, chief investment officer at Morningstar Wealth, noted that smaller companies and technology stocks are more sensitive to rising interest rates.MSCI's gauge of stocks across the globe fell 1.54 points, or 0.13%, to 1,153.16.Earlier, the pan-European STOXX 600 index finished up 0.51%.In the bond market, the 2-year note yield, which typically moves in step with Fed interest rate expectations, rose 12.79 basis points to 4.36%, from 4.232% late on Thursday."What was viewed as hawkish is the acknowledgement that inflation remains a concern and that he views the interest rate channel as the way of addressing inflation concerns," said Morningstar's Straehl, adding that it was being "baked into market expectations at the short end."Terms and Privacy PolicyEU DSA contactPrivacy & Cookie SettingsMore Info