Markets head into the first Fed meeting run by new Chair Kevin Warsh with almost no idea what he thinks about the recent surge in job growth, the acceleration in inflation or the path of interest rates.
And that may be by design.
Warsh has strongly criticized Fed communications, saying they have led to policy errors and placed the Fed more at the center of market decisions and the economy than it should be. His plans for “regime change” include a rethink of how the Fed forecasts and talks about its plans for monetary policy. That appears to include both quantity and frequency.
“If you ask me my true personal opinion right now, Fed chairs and other central bankers around the FOMC, they speak quite frequently,” Warsh said at his confirmation hearing in April, referring to the Federal Open Market Committee. “I would say this, I think truth-seeking is more important than repetition. If one has a press conference, one wants to deliver some important news.”
