MORNING BID EUROPE-Warsh heads into Jackson Hole hot seat

A look at the day ahead in European and global ​markets from Rae Wee All eyes are on ​a speech from the world's ‌most ​powerful central banker later on Friday, with investors focused on what Federal Reserve Chair Kevin Warsh says about inflation and, specifically, how he ‌intends to get it back down to target.

It's likely he could underwhelm expectations, given Warsh's reluctance in providing forward guidance, but at the very least markets will be hoping for a clearer reconciliation ‌between recent policy decisions and the hawkish inflation rhetoric. While a steep selloff in U.S. ‌Treasuries has abated for now, yields remain well above their levels at the start of the year, partly reflecting investors' doubts about the Fed's ability to keep inflation in check.

Markets turned cautious ahead of the speech, with U.S. futures ⁠dipping lower ​while European futures ⁠nudged higher. It isn't just the Fed that has a credibility issue. The U.S. Treasury Department does too.

Treasury Secretary Scott ⁠Bessent and Warsh appear at odds over a question at the heart of U.S. financial policy. How hands-off ​can policymakers be when it comes to setting a price for money? Warsh has advocated retreating ⁠from some of the Fed's longstanding communication policies in favour of letting markets do the heavy lifting, while Bessent has ⁠deployed ​a number of tools, some of them unusual, in the name of aiding market function.

Globally, ballooning debt burdens are prompting debate about where the line between fiscal and monetary policy ⁠should be drawn. This topic of "fiscal dominance" will be another key question facing Warsh in Jackson Hole, Wyoming, ⁠later on Friday, though ⁠investors may be disappointed if they are looking to him for answers.

Key developments that could influence markets on Friday: - Fed Chair Kevin Warsh's ‌speech in Jackson ‌Hole - German import prices (July) - French preliminary inflation ​data (August) (Editing by Jamie Freed)