Policy Clarity: The value markets assign to knowing a central bank’s reaction function—what it is watching, what would change its mind, and where the bar sits—independent of whether the message itself is friendly. This week separated the two. Kevin Warsh used his first Jackson Hole address to deliver unmistakably hawkish content: better-than-expected summer CPI and PCE readings, he said, do not tell him underlying trends have meaningfully improved, and the Fed must be confident inflation is genuinely headed toward target. Goolsbee publicly agreed. By the standard reading, that should have hurt—and Friday’s tape did soften, with the S&P slipping 0.25%. Yet stocks traded higher through midday on the remarks and all three indexes closed the week in the green, the Dow ending a two-week losing streak. Principal Asset Management’s Seema Shah named the reason: investors place a premium on clarity even when that clarity carries a more hawkish message. The mechanism is straightforward. Uncertainty about the reaction function forces investors to price a wide distribution of outcomes, raising risk premiums across every asset; a clear framework narrows that distribution, and a narrower distribution is worth paying for even when its center sits at a less favorable rate. It is the opposite of the July 29 hold, when patience without explanation triggered the worst Dow session since April 2025. The practical takeaway for portfolios: read Fed communication for the reaction function, not the tone. A hawkish chair who tells you exactly what he is watching is more useful than a neutral one who does not—and Warsh has now told markets that summer’s inflation relief will not be enough on its own.