The Federal Reserve used to talk a lot. Under Kevin Warsh, the central bank’s new chair, it apparently plans to say a whole lot less. And markets, which spent years hanging on every syllable of Fed guidance, are not handling the silence well.
The latest episode of the Reuters Econ World podcast, released June 24, explores what happens when the most powerful central bank in the world decides to go quiet.
Less talk, more turbulence
The podcast, titled “Fed talk,” features economists Howard Schneider and Balazs Koranyi discussing Warsh’s preference for reducing the volume and complexity of Fed communications.
The conversation centers on Warsh’s inaugural FOMC meeting as chair, held June 16-17. The Committee voted to hold the federal funds rate steady at 3.5%-3.75%. The policy statement released after the meeting was notably shorter and simpler than previous versions.
