TMGM Daily Market Breakfast: 28 August 2026

Morning Snapshot

• Federal Reserve officials used the opening of Jackson Hole to stress that U.S. policy remains restrictive, with several policymakers warning that inflation pressures tied to energy, tariffs and geopolitics have not fully faded.
• Markets turned to Fed Chair Kevin Warsh’s Jackson Hole keynote later on Friday, with several reports highlighting limited expectations for explicit forward guidance ahead of the September 16 policy meeting.
• The European Central Bank’s July meeting account and fresh national inflation data reinforced expectations that another ECB rate increase remains possible unless the inflation outlook improves materially.
• Bank of Japan tightening expectations stayed elevated after Deputy Governor Shinichi Himino said policymakers must pay more attention to upside inflation risks, while Tokyo inflation data strengthened the case for a September move.
• Oil markets remained dominated by Middle East supply risks, with Brent settling up 2.1%, WTI trading above $82.50 and uncertainty over Strait of Hormuz traffic continuing to shape inflation concerns.
• Iran said it is preparing conditions for reopening the Strait of Hormuz, while Tehran also condemned new U.S. economic measures as illegal and the U.S. Treasury prepared to press G20 finance ministers to cut off funding flows to Iran.
• China pushed back against reported U.S. consideration of an additional 7.5% Section 301 tariff on Chinese imports while keeping high-level communication channels with Washington open ahead of possible leader-level talks later this year.
• Canada and the United States remained locked in an escalating tariff dispute after U.S. duties of 50% on a range of Canadian goods took effect and Ottawa responded with tariffs of up to 50% on about $20 billion of U.S. imports.
• Charles Schwab said it will add spot trading in Solana, Avalanche and Chainlink to Schwab Crypto in the coming months, expanding a platform that already offers Bitcoin and Ethereum trading.
• Investors also watched the upcoming U.S. annual benchmark revision to nonfarm payrolls, a labor-market update that has drawn increased attention after large revisions in recent years.

Market Developments

Energy

ICE Brent settled up 2.1% in the latest session, while WTI traded around $82.70 to above $83.00 per barrel during Asian and U.S. trading as Middle East tensions, Strait of Hormuz traffic uncertainty and tight U.S. fuel inventories kept supply risks in focus.

Foreign Exchange

EUR/USD traded around 1.1650 to 1.165, AUD/USD tested the 0.7200 area and three-month highs, USD/JPY moved around 159.30 to 159.50, and USD/CAD traded near 1.3870 as investors balanced central-bank signals, inflation data and trade tensions.

Digital Assets

Solana rose 13%, Chainlink gained 6% and Avalanche added 4% after Charles Schwab said it plans to roll out spot trading in the three tokens on its Schwab Crypto platform in the coming months.

Macroeconomics & Central Banks

Fed Officials Keep Inflation Fight Front and Centre at Jackson Hole

Federal Reserve officials struck a cautious tone at the start of the Jackson Hole symposium, underscoring that inflation remains above target and that restrictive policy is still needed. Boston Fed President Susan Collins said the latest PCE report did not change her view that policy is restrictive and should continue to deliver gradual disinflation.

Cleveland Fed President Beth Hammack said “now” is the time to tackle inflation and later reiterated that the labor market is broadly in balance but that policymakers still need restrictiveness in policy. Chicago Fed President Austan Goolsbee said the economy remained broadly stable but warned that tariffs and war-related price increases were complicating the inflation outlook, while Kansas City Fed President Jeffrey Schmid said the energy shock was leaking into the broader economy and that the Fed remained committed to returning inflation to 2%.

The latest inflation data kept that debate alive. Headline U.S. PCE rose 0.2% month on month in July after falling 0.1% in June and held at 3.7% year on year for a second straight month, above the Fed’s 2% target. Core PCE rose 0.2% month on month and stayed at 3.3% year on year, while the Dallas Fed trimmed mean PCE and Cleveland Fed median PCE were unchanged at 2.3% and 2.7% respectively. Weekly initial jobless claims fell to 203,000 in the week ended August 22, adding to evidence that the labor market remains firm.

Warsh Keynote Puts Jackson Hole in Focus Ahead of September Fed Meeting

Attention shifted to Fed Chair Kevin Warsh’s keynote at Jackson Hole later on Friday, a speech that several market reports described as the day’s main policy event. The September 16 FOMC meeting remains in focus, with one report citing market pricing of a 35% chance of a rate hike and another putting the odds at 36% for a 25 basis-point increase to a 3.75%-4.00% target range.

Warsh has been described as reluctant to provide forward guidance, and reports noted that this year’s symposium schedule does not include a monetary policy panel or a Q&A session. That has tempered expectations for a major policy signal, even as the speech carries added weight because previous Fed chairs have used Jackson Hole to flag turning points in policy.

Beyond rates, Warsh may use the event to discuss the Fed’s task forces on communications, the balance sheet, economic data, productivity and jobs, and the inflation framework. The annual benchmark revision to nonfarm payrolls and the final University of Michigan consumer sentiment reading were also on the U.S. calendar.

ECB Account and Inflation Data Keep September Hike Possibility Alive

The European Central Bank’s account of its July 22-23 meeting showed policymakers remained open to further tightening after unanimously leaving rates unchanged, with another increase seen as likely unless the inflation outlook improves materially. The account said pre-emptive action could be justified if inflation expectations became unanchored, underlying price pressures picked up clearly or firms accelerated price increases more rapidly than usual.

Fresh national inflation readings added to that backdrop. French CPI accelerated to 2.4% year on year in August from 2.1%, while French HICP rose to 2.7% from 2.4%. Spanish national CPI climbed to 4.3% from 3.6%, and harmonized inflation was reported at 4.5%. Euro area economic sentiment for August rose 1.3 points to 98.4, while the EU indicator increased 1.0 point to 98.2.

ECB Governing Council member Martins Kazaks said another rate increase in September is a considerable possibility, while hawkish board member Isabel Schnabel was due to speak in Wyoming later in the day. Separate commentary based on the July account said a quarterly pace of 25 basis-point hikes in September, December and March 2027 would take the deposit rate to 3%, though risks were described as tilted toward fewer moves.

BoJ Tightening Expectations Stay Elevated After Himino Comments and Tokyo CPI

Bank of Japan tightening expectations remained elevated after Deputy Governor Shinichi Himino said the central bank needs to pay more attention to upside inflation risks than before. He also said the BoJ does not need to have the full data on the impact of past rate hikes before moving again, reinforcing the view that policymakers are considering a faster pace of tightening.

Tokyo inflation data strengthened that case. Inflation in the Greater Tokyo area was reported at 1.9% in August, while the measure excluding energy and fresh food was 2.0%. Service-sector inflation was 0.39% in August, its highest level in nearly a year, and annualized three-month readings were described as showing accelerating momentum.

Reports said markets were pricing roughly an 80% to 84% probability of a September BoJ rate hike. The yen reaction to Himino’s remarks was limited, but the central bank’s increased emphasis on foreign exchange developments in its inflation outlook was seen as aligning with the Ministry of Finance’s concern over yen weakness. Naoki Tamura, a vocal supporter of faster tightening, was also set to attend Jackson Hole in place of Governor Kazuo Ueda.

Geopolitics, Trade & Energy

Hormuz Uncertainty Keeps Oil Supply Risks and Inflation Pressures in Focus

Oil markets remained highly sensitive to developments around the Strait of Hormuz, where uncertainty over shipping flows, diplomacy and inventories continued to drive price action. ICE Brent settled up 2.1% in the latest session, while WTI traded around $82.70 and also moved above $83.00 per barrel during the reporting period.

Reports said diplomatic efforts to revive U.S.-Iran talks had stalled after President Donald Trump indicated Washington had no intention of returning to the terms of the June memorandum of understanding. At the same time, there were signs that some oil was still moving through Hormuz. One report said U.S. Energy Secretary Chris Wright claimed the U.S. military helped ship more than 15 million barrels through the strait in a single day last week, with a seven-day average above 8 million barrels a day, while tracking data suggested a lower 2 million to 6 million barrels per day range.

Inventories have so far cushioned the impact of reduced flows, but that buffer was described as finite. U.S. distillate inventories were reported by the EIA to be at their lowest seasonal level on record, while gasoline and distillate stocks also saw large drawdowns. Reports also pointed to possible longer-term supply shifts, including U.S. discussions over a stake in Venezuelan oil fields and Venezuela’s consideration of leaving OPEC.

Iran Sets Conditions on Hormuz Reopening as U.S. Pressure Campaign Intensifies

Iran’s Security Chief Mohsen Rezaei said Tehran is preparing a list of conditions for reopening the Strait of Hormuz in response to a request from mediators, with those conditions including an end to the war in the region. The comments added a new political layer to an already fragile shipping situation in one of the world’s key oil chokepoints.

At the same time, Iran condemned fresh U.S. economic measures, calling them illegal, reprehensible and a form of “state terrorism.” Tehran urged other countries not to implement the sanctions and called on the international community and United Nations bodies to act against Washington’s measures.

On the U.S. side, Treasury Secretary Scott Bessent was reported to be preparing direct appeals to G20 finance ministers to cut off the economic flows that sustain the Iranian regime and the Islamic Revolutionary Guard Corps. The combined developments pointed to a further hardening in the economic confrontation between Washington and Tehran.

China Opposes Possible New U.S. Tariffs While Keeping Diplomatic Channels Open

China said it firmly opposes reported U.S. consideration of an additional 7.5% tariff on Chinese imports linked to a Section 301 investigation into alleged overcapacity across 16 economies. Beijing’s Commerce Ministry described the possible move as unilateral and protectionist and said China would closely assess any further U.S. measures.

Chinese officials also reserved the right to take all necessary steps in response, but the tougher trade rhetoric was paired with signals that high-level communication with Washington remains open. China’s Foreign Ministry said the two sides remain in contact over arrangements for possible interaction between their leaders later this year.

The dual message suggested Beijing is preparing to resist additional trade pressure while trying to avoid a broader rupture in the U.S.-China relationship ahead of a possible Trump-Xi summit.

U.S.-Canada Tariff Dispute Deepens After Retaliatory Measures

Trade tensions between Washington and Ottawa remained elevated after U.S. tariffs of 50% on a range of Canadian goods took effect following failed negotiations on a trade agreement. Canada responded with tariffs of up to 50% on around $20 billion worth of U.S. imports, announced by Prime Minister Mark Carney.

The escalation raised concerns about a broader hit to Canadian economic activity and kept the bilateral trade relationship in focus for North American markets. Reports also noted that firmer oil prices were offering some support to the Canadian dollar because Canada remains a major oil exporter to the United States.

Corporate & Digital Assets

Charles Schwab Expands Crypto Offering to Solana, Avalanche and Chainlink

Charles Schwab said it plans to add spot trading for Solana, Avalanche and Chainlink to Schwab Crypto in the coming months, broadening a digital-asset platform that already supports Bitcoin and Ethereum. The company said clients will be able to buy and sell the three additional tokens directly in their Schwab Crypto accounts.

Schwab Crypto began rolling out digital-asset trading to clients in May 2026 as part of the firm’s broader expansion into the sector. Following the announcement, Solana rose 13%, Chainlink gained 6% and Avalanche advanced 4%.

Upcoming Key Events

• Fed Chair Kevin Warsh Speech at Jackson Hole — 3:00 pm London time: Warsh is due to deliver the Jackson Hole keynote, a closely watched speech ahead of the September 16 FOMC meeting.
• U.S. Nonfarm Payrolls Annual Benchmark Revision — null: Investors are watching the annual benchmark revision to payrolls, a labor-market update that has drawn increased attention after large revisions in recent years.
• Final University of Michigan Consumer Sentiment — null: The final University of Michigan consumer sentiment reading is also due on the U.S. calendar.
• ECB Executive Board Member Isabel Schnabel Speech — null: Schnabel is due to speak in Wyoming as markets assess whether ECB officials reinforce the case for further tightening.