NEW YORK, Aug. 29 -- In the derivatives market, the question Kevin Warsh answered on Friday had already been asked all week. S&P 500 futures contracts had been pulling back from their post-Nvidia highs since Thursday evening, with traders unwilling to hold full exposure into a speech from a Fed chair who had given no public hint about where his hawkish instincts would lead him at Jackson Hole.

By the time Warsh finished, the repricing was swift. S&P 500 e-mini futures fell in Friday's premarket, reflecting the same recalculation visible in Treasury markets, where the 10-year yield rose to 4.679% and the 2-year yield climbed to 4.298%. The probability of a September rate hike in fed funds futures jumped from 35% to 48% within hours of War...