Treasury Secretary Scott Bessent earlier this year gave a nod to the incoming Federal Reserve Chairman Kevin Warsh as the "new sheriff in town," but the public praise belies an underlying tension between the pair.

Their relationship will be closely monitored, along with further interactions between the central bank and executive branch, which has already faced much scrutiny. A new test comes Friday, as our colleague Nick Timiraos writes, when Warsh takes center stage in Jackson Hole at the Kansas City Fed's annual gathering.

Bessent surprised market watchers last week by announcing that the Treasury would at least double the government's buybacks of long-term debt. His goal was to push down yields that had hit 19-year highs, Nick reports. That process could loosen financial conditions at the very moment the Fed may want to tighten them.

Central bankers and investors will be looking for more clues about the direction of interest rates, so we checked in with Greg Ip, The Wall Street Journal's chief economics commentator, for his take. The following is a condensed version of our conversation:

What is the world watching most closely at Jackson Hole?

The main thing is Chairman Kevin Warsh's speech Friday. Thus far, Warsh has studiously stuck to his policy of not talking about where interest rates are going or even his interpretation of recent economic developments. Will he break the cone of silence and tell us what he thinks? What we most want to hear: Does he share his hawkish colleagues' concern that inflation is not going to fall back to 2% unless the Fed raises rates? Or will he side with those who think that as tariffs and energy effects fade, inflation will drop, without needing to raise rates? Even if Warsh avoids commenting, many of his colleagues in attendance will be sharing their views in interviews and the like.

Political pressure on the Fed has been a big topic of discussion among Fed watchers since Trump took office. Just before last year's Jackson Hole meeting, Trump tried to fire a Fed governor, Lisa Cook. Will that be a topic of discussion this year?

I don't expect politics to come up much in the public program, but it will informally over cocktails and on hiking trails. Folks might be especially intrigued by things the Treasury secretary, Scott Bessent, has been doing lately that start to overlap with the Fed's sphere of influence. In particular, last week's announcement that he would increase buybacks of long-term bonds seems aimed at easing borrowing conditions. Typically, that's the Fed's job.

In your conversations, do you get a sense that people see these moves by the Treasury Department or Trump representing an unprecedented encroachment on the Fed's independence?

Everyone agrees Trump's moves are a threat to Fed independence. While some things Bessent has done do risk blurring the line between the Fed and the administration, the buybacks seem like a blunt effort to boost the economy ahead of the midterms. The bigger concern I hear is that both the Fed and Treasury are shifting from sources of stability to instability in our financial system. Warsh is telling us less about how he sees the economy, and Bessent is being activist and unpredictable on things like debt management and currency intervention. Investors may start to demand a higher "uncertainty premium" in Treasury bonds.

Dive deeper here:

Exclusive: Fed's Collins Says Rate Increase Warranted If Inflation Disappoints

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The Day Ahead

📈 Economic Indicators

Fed Chairman Kevin Warsh delivers an address at the Jackson Hole Economic Policy Symposium.

The Institute for Supply Management-Chicago releases the Chicago purchasing managers index for August.

The University of Michigan releases its final inflation and spending outlooks for August.

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Dollar General is gaining market share as multiple factors put pressure on the discount retailer's core customer base, prompting shoppers to flock to its stores in search of low-cost goods.

C-suite quote: "Most notably, higher and more volatile fuel prices have forced customers to further prioritize purchases with a focus on value and affordability," Chief Executive Todd Vasos said on a call with analysts Thursday.

An uptick in traffic helped drive sales higher during the recent quarter. At the same time, shoppers on average spent more per transaction, even as Dollar General reinvested tariff refunds into the business to lower prices. Improving demand trends gave the company confidence to raise its outlook for the year.

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CFO Moves

Rivian Automotive, the Irvine, Calif.-based electric-vehicle maker, said Claire McDonough is stepping down as CFO after more than five years in the role. The company has started a search for its next CFO, and is evaluating both internal and external candidates. The company expects to appoint Derek Mulvey, its vice president of finance, as interim CFO effective with McDonough's departure on Oct. 30. Mulvey joined Rivian in 2021, and previously worked at JPMorgan. McDonough is leaving Rivian to pursue a new opportunity and relocate to the East Coast to be closer to her family, the company said. McDonough joined Rivian in 2021, leading the company through its initial public offering later that year.

-Kelly Cloonan contributed to today's Ledger.

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