Stocks Hold Steady, Bond Market Zigzags08/28 09:34

   The U.S. stock market is holding relatively steady Friday after the head of 
the Federal Reserve said once again in a highly anticipated speech before 
global investors and central bankers that inflation remains too high.

   NEW YORK (AP) -- The U.S. stock market is holding relatively steady Friday 
after the head of the Federal Reserve said once again in a highly anticipated 
speech before global investors and central bankers that inflation remains too 
high.

   The S&P 500 was virtually unchanged in morning trading. The Dow Jones 
Industrial Average was up 59 points, or 0.1%, as of 10:10 a.m. Eastern time, 
and the Nasdaq composite was 0.2% lower.

   The bond market was showing more of a reaction, as yields zigzagged in the 
minutes immediately after the text of Kevin Warsh's speech was released. It's 
his first time speaking as chairman of the Fed at an annual economic symposium 
in Jackson Hole, Wyoming, which has been the setting for major Fed policy 
announcements in the past.

   Warsh again was adamant that he wants to give financial markets fewer clues 
about what the Fed plans to do with interest rates to fulfill its job of 
keeping inflation low and the job market strong. He has said he wants markets 
to react to what incoming data says about the economy and inflation rather than 
what the Fed says.

   But he was under pressure to offer more clarity about whether his tough talk 
about getting high inflation back down to the Fed's 2% goal is just that, or 
whether the Fed plans to back it up with action. The Fed has kept its main 
interest rate steady since December, even though inflation remains well above 
its target.

   Higher rates could help improve inflation, but they would also slow the 
economy and hurt prices for investments. And President Donald Trump, who 
appointed Warsh, has been vocal about wanting interest rates to be lower rather 
than higher.

   The U.S. Treasury Department made an unusual move last week to intervene in 
the bond market to get yields lower on longer-term Treasurys, though analysts 
said it will likely have only a limited effect.

   Warsh said in his speech Friday that "short-term interest rates are the 
predominant tool" to do the Fed's twin jobs of keeping inflation under control 
and the job market strong. He also said, "I would be hard pressed to describe 
broad financial conditions as restrictive," implying that short-term interest 
rates are not high enough to tamp down the economy and inflation.

   The yield on the two-year Treasury, which closely tracks expectations for 
what the Fed will do with its federal funds rate, jumped to 4.29% from 4.22% 
just before the speech.

   Longer-term yields, which move more on expectations of what the economy and 
inflation will do in upcoming years, were mixed. The 10-year Treasury yield 
rose to 4.69% from 4.67% late Thursday but was still roughly where it was in 
the morning before the speech.

   The 30-year yield fell to 5.17% from 5.19% late Thursday.

   On Wall Street, Gap jumped 15.4% after the retailer reported stronger profit 
for the latest quarter than analysts expected. It also said Michael Francis, an 
industry veteran who began his career on the retail sales floor, will take over 
as head of its Old Navy stores.

   Marvell Technology weighed on the market and fell 6.9% even though the chip 
company reported profit and revenue for the latest quarter that edged past 
analysts' expectations. CEO Matt Murphy said its business related to 
artificial-intelligence technology is strong, and it raised its forecasts for 
upcoming revenue growth.

   But analysts said much of that optimism may have already been baked into 
Marvell's stock price, which came into the day with a surge of 184% for the 
year so far.

   In stock markets abroad, indexes rose across much of Europe following a 
mixed finish in Asia. South Korea's Kospi fell 1.8%, and France's CAC 40 rose 
1% for two of the world's bigger moves.