The Fed Gets More Hawkish, Silver Prices Slump

Silver prices slumped throughout this week, after the United States central bank showed a hawkish stance for the first time under Kevin Warsh’s leadership in his speech at Jackson Hole.

Referring to Refinitiv, silver prices in the final trading session of the week, Friday (28/8/2026), closed at US$66.35 per troy ounce, plunging 4.19% from the previous day’s trade. Throughout this week, silver prices fell 3.79% point-to-point (ptp).

The US central bank (Federal Reserve/The Fed) once again surprised global markets, after Fed Chair Kevin Warsh began to adopt a hawkish stance. Warsh still views inflation risk as a serious problem.

Citing The Wall Street Journal (WSJ), Warsh said the Fed may still need to “try harder” to control inflation. This statement prompted the market to reassess the possibility of an interest rate hike at the upcoming September Fed meeting.

Market participants are now projecting a September interest rate hike after Warsh said the Fed would “have a lot of work to do” if policymakers are not confident that core inflation is returning to the 2% target, marking his closest statement yet to acknowledging that a rate hike may be needed to ease price pressures.

Market participants now estimate a 58% chance of a US interest rate hike in September, compared with 36% before Warsh’s comments, and an 89% chance of a hike in December, according to the CME FedWatch tool.

Like gold, silver also tends to lose its appeal in a high-interest-rate environment because it offers no yield.