Fed Chairman Kevin Warsh will participate in a panel discussion with the President of European Central Bank Christine Lagarde, Bank of England Governor Andrew Bailey, and Bank of Canada Governor Tiff Macklem at the ECB Forum on Central Banking in Sintra, Portugal.
- 1200 GMT
- 0800 US Eastern time
A moderated ‘policy panel’ / Q&A.
The event will be livestreamed.
We most recently heard from Warch after the Federal Open Market Committee (FOMC). Goldman Sachs report:
- “The Committee thought that the labor markets were stable. There were some people around the Committee who thought that it was trending better than that, [and] trends matter more than data points.” He also reiterated language from the post-meeting statement, saying, “Inflation remains elevated relative to the Committee’s 2 percent goal, in part reflecting supply shocks that have driven price increases in certain sectors, including energy… but to be clear, the Fed will deliver price stability.”
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From the day of the June FOMC:
- FOMC voted unanimously to hold the federal funds rate at 3.5%-3.75%
- Policy statement cut from 341 words to 130, dropping all forward guidance and easing bias language
- Dot plot median for end-2026 moved to 3.8% from 3.4%, signalling at least one hike is live; nine of 18 participants pencilled in a hike this year
- Warsh declined to submit his own dot, citing concerns about the tool’s usefulness, and flagged a broader review of Fed communications
- Five task forces announced to examine communications, balance sheet, data sources, productivity and jobs, and the inflation framework
- Officials raised the 2026 headline inflation forecast to 3.6% and core to 3.3%, both up sharply from 2.7% in March
And added thoughts on Warsh’s new approach as Chair:
Fed Chair Warsh held rates at 3.5-3.75%, stripped cut-bias language from a shorter policy statement, skipped the dot plot, and announced five task forces to overhaul Fed operations including communications. Warsh said less and meant more, and markets are only beginning to price the difference.
- The Warsh communication style, whether deliberate brevity or Greenspan-era deliberate opacity, may serve the same purpose: preserving Fed optionality by keeping markets guessing
- Forward guidance built on constant explanation has failed its most important test, with US inflation running at 4.2% and the 2% target unmet for five years
- A quieter Fed has historical precedent, from Volcker’s action-over-words approach to the era when rate decisions were not even announced
- The real signal from Warsh’s debut was not silence but compression: a hard, unambiguous commitment to 2% inflation that forecloses interpretation rather than inviting it
Old pic!
