With signs of economic strain multiplying, Federal Reserve Chair Kevin Walsh is set to focus on reassuring investors next week. The effort comes as policymakers gather for the annual Jackson Hole economic policy symposium, an event that could mark a pivotal moment for one of President Trump's key economic appointees.

This week, U.S. public debt hit a record $40 trillion, while long-term Treasury yields climbed to their highest level in 19 years. Canada's retaliatory tariffs, announced over the weekend, are set to take effect within weeks, and Washington's latest threats against Tehran, described as an "economic Normandy," could also deliver fresh shocks to the global economy.

Treasury Secretary Scott Bessent, also a Trump appointee, is facing mounting criticism over how he communicates economic policy. Some investors say Bessent's surprise announcement of a Treasury buyback plan this week has undermined the credibility of the department's policy guidance. Meanwhile, Walsh has narrowed the Fed's communication channels with investors, sharply reducing forward guidance from rate-setting officials on the outlook for U.S. interest rates.

On Friday, Walsh will deliver his first speech as Fed Chair at the Kansas City Fed's Jackson Hole conference, addressing central bankers and economists from around the world. He is expected to use the address to explain the policy framework behind his streamlined communication style.

A survey of economists conducted by the University of Chicago Booth School of Business shows that a majority of respondents are increasingly worried it will take the Fed longer to bring inflation back under control. Some scholars also criticized the communication strategies of both Walsh and Bessent.

Nearly 60% of respondents said the time needed for the central bank to achieve its 2% inflation target will be longer than when the Senate confirmed Walsh as Fed Chair in mid-May. U.S. inflation has now exceeded the Fed's 2% goal for more than five consecutive years. The U.S.-Iran conflict has pushed up gasoline and diesel prices, adding fresh upward pressure on prices. Trump's latest tariffs on Canada, combined with his administration's threat to sanction any nation deemed to be assisting Iran, could further intensify inflationary pressures.

"It's troubling that Walsh is unwilling to offer a clear, public assessment of the current state of the U.S. economy and its outlook," said Christiane Baumeister of the University of Notre Dame. "This invites unnecessary market speculation, could undermine economic stability, and raises further doubts about the Fed's credibility."

More than 60% of respondents said the rise in long-term Treasury yields since Trump nominated Walsh in late January has been driven to a large or moderate extent by damage to the Fed's credibility. Robert Barbera of Johns Hopkins University said Bessent's intervention in the bond market has cast doubt on the dollar's outlook. A weaker dollar would push up the cost of imported goods, adding to inflation risks.

Eric Rosengren, former president of the Boston Federal Reserve Bank, said that even if Walsh chooses to stay silent on future policy options, he still needs to explain current policy decisions. "This communication strategy is causing the Fed to lose credibility," Rosengren said.

Nearly three-quarters of respondents said Walsh's decision to abandon the more open communication style of predecessors Jay Powell, Janet Yellen, and Ben Bernanke is the most significant change he has made since taking office in late May. A large majority of respondents, 75%, said Walsh's overall performance since becoming Chair has met their expectations.

Walsh has previously said he wants to break the feedback loop between the Fed and investors, so markets spend less time overinterpreting officials' remarks and focus more on economic data. Deborah Lucas of MIT noted: "The Fed has become increasingly mired in micromanaging markets, which has hurt the normal functioning of capital markets. I applaud Walsh for confronting the vested interests that defend the status quo and trying to reverse this trend."

Jon Faust, a Johns Hopkins researcher and former adviser to ex-Fed Chair Powell, said earlier concerns that Walsh would cave to Trump's pressure have eased. Despite high inflation, Trump has continued to push the Fed to cut borrowing costs sharply. "Fears that he would be Trump's puppet have largely dissipated, and he hasn't created turmoil within the Fed," Faust said. "Some of the worst-case scenarios that were once envisioned have largely been ruled out."