Federal Reserve Chair Kevin Warsh delivered his first speech at the Kansas City Fed’s annual economic symposium in Jackson Hole, Wyoming, on Friday, signaling a more deliberate approach to policy communication while stopping short of reviving formal forward guidance.
Warsh, who has previously described the Fed’s communications as too noisy, suggested a preference for a "quieter Fed" that prioritizes clarity over prediction. He reiterated the central bank’s 2% inflation target and stated that policy adjustments would hinge on sustained progress toward that goal. "We must be confident that underlying inflation is moving to our objective, clearly and at sufficient speed," he said. "Otherwise, we have work to do."
The remarks come ahead of the Federal Open Market Committee’s next policy meeting scheduled for September 15–16. The Fed has held its benchmark interest rate in a 3.50%–3.75% range since July, following a decision taken at the June 16–17 meeting. At the July 29 press conference, officials left rates unchanged and provided no explicit forward guidance on future moves.
Economists and policymakers interpreted Warsh’s comments as a measured step toward greater transparency without reverting to the detailed projections that characterized the Fed’s previous communication style. Nathan Sheets, global chief economist at Citigroup, described Warsh’s economic assessment as "very helpful and very constructive," noting that it provided clearer insight into the Fed’s current thinking than the July press conference.
Robert Tetlow, a research economist and former Fed staffer, characterized Warsh’s remarks as a "meaningful step forward," adding that the Fed chair’s assessment of the economy was "quite conventional." John Williams, president of the New York Fed, supported the decision to end forward guidance at the June meeting, calling it "exactly the right call" given the elevated level of uncertainty.
Other Fed officials echoed the importance of communication. Cleveland Fed President Beth Hammack emphasized the role of policymakers in articulating their views to aid businesses and households in decision-making. Chicago Fed President Austan Goolsbee warned that vague communication risks amplifying market volatility, as investors fill gaps with their own assumptions.
Patrick Harker, former Philadelphia Fed president and professor at the University of Pennsylvania’s Wharton School, underscored the urgency of addressing inflation, which has remained above the 2% target for nearly six years. "You can’t keep saying this is our job to get it down to 2% and then not do the things that are needed to achieve that outcome," he said. "Actions speak way louder than words."
