Gold ‘Runs Up’ When Fed Credibility Erodes | Former Fed President Jim Bullard
Aug 29, 2026 Market Updates and Analysis
Gold, the Fed and a September rate hike: former Federal Reserve Bank of St. Louis President Jim Bullard on Kevin Warsh's Jackson Hole speech, why foreign central banks found physical gold more desirable than Bitcoin, and why he thinks the FOMC is split pretty much down the middle.
Warsh told Jackson Hole this morning that responsibility for 65 months of inflation sits squarely with the central bank. Markets moved a September hike from a long shot to the base case inside an hour. Bullard puts the committee divide at roughly 10 to 9, explains why a hold could still be hawkish, and lays out the trap the dot plot creates for a chairman who won't give forward guidance.
He breaks with Treasury Secretary Scott Bessent on the long-end bond buybacks, aligning himself with Stan Druckenmiller and arguing the intervention won't shift the long run trend. On the fiscal side he warns of 6% deficits as far as the eye can see, with debt heading toward 120% or 150% of GDP.
On gold, he says foreign central banks have been diversifying away from Treasuries, that physical gold proved more desirable than Bitcoin over the past year, and that gold running up signals eroding faith in the Fed, something he says is on the central bank's radar. Asked about the statutory $42.22 book value on America's 261 million ounces, his answer was simple. Why not mark to market.
Jim Bullard ran the Federal Reserve Bank of St. Louis from 2008 to 2023 and is now Dean of the Daniels School of Business at Purdue University.
Recorded August 28 2026
Follow Jeremy Szafron on X: @JeremySzafron ( / jeremyszafron )
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CHAPTERS
00:00 The Fed Just Blamed Itself for Inflation
01:27 Did Warsh Just Prep Markets for a September Hike?
03:18 What's the Case Left for Holding Rates?
05:41 What Rate Actually Becomes Restrictive?
06:29 The Dot Plot Credibility Trap
08:36 Inside a Committee Split Down the Middle
12:38 Is Rate Policy Being Run From the Wrong Building?
16:02 Deficits, Debt and Fiscal Dominance
18:14 The 1951 Accord Running in Reverse?
25:07 Why Physical Gold Beat Bitcoin This Year
27:30 Should the US Revalue Its Gold?
29:57 "Money Matters": Warsh Puts Money Creation Back on the Table
#Gold #FederalReserve #JimBullard #GoldPrice #Fed #RateHike #JacksonHole #KevinWarsh #Inflation #CentralBanks #Bitcoin #GoldVsBitcoin #KitcoNews
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