Federal Reserve chair Kevin Warsh seemingly wants to outsource US monetary policy to financial markets. In his telling, the central bank’s job is to be the referee, not the one influencing market expectations.Warsh says he wants markets to play the ball, not the Fed. To ensure that outcome, he argues that not only is it essential that the Fed provide no forward guidance about the future path of interest rates, but also that the Fed not explain how it would respond as circumstances change, that is, not explain the central bank’s monetary policy reaction function.Bloomberg OpinionSubscribe to gift this articleGift 5 articles to anyone you choose each month when you subscribe.Subscribe nowAlready a subscriber? Fetching latest articles
Warsh’s approach to Fed policy is deeply flawed
When the Fed boss refuses to provide information about what is important to the Fed on monetary policy, I get off the bus.
117 words~1 min read
