Fed chair delivers tough interest rate love as Nvidia shares soar - The week on Wall Street ended with some very big winners but also cautionary words about controlling inflation. - Nvidia reported its fiscal year Q2 revenue doubled. Three events dominated the market trading in the week ending Aug. 28: - Kevin Warsh's hawkish Jackson Hole debut. - Nvidia's blowout earnings. - A cybersecurity sector rally that produced multiple single-day records. About those interest rates Federal Reserve Chair Kevin Warsh used his first Jackson Hole keynote to deliver the most aggressive message the Fed has issued in months when it comes to raising interest rates, hitting three distinct pressure points: On inflation, Warsh reaffirmed the 2% level as "a firm, fixed target" and said summer's better-than-expected prints, or completed transactions, "do not tell me that underlying trends have meaningfully improved." Core Personal Consumption Expenditure (PCE) price index — the Fed’s favorite inflation gauge — is tracking at 3.7% over the past 12 months and 4.1% over the past six, both materially above mandate. “There is one signal nobody can miss: The responsibility for 65 months of sustained, elevated inflation sits squarely with the central bank,” he said. On financial conditions, Warsh said he would struggle to describe current conditions as restrictive, citing credit spreads near historic tights and easy bank lending standards. The subtext: There’s room to hike interest rates from here. On the labor market, Warsh flagged the 4.1% unemployment rate as consistent with full employment, removing the traditional dovish trigger for rate cuts. Rates markets repriced immediately. Odds of a September Fed interest rate hike jumped to 57.5%, versus 39.9% one week ago and 24% one month ago, per CME FedWatch. The 2-year Treasury yields pushed above 4.30%. The dollar rebounded. Nvidia's best day since April 2025