Kevin Warsh Is Making the Fed Talk a Lot Less

The Fed spent years dramatically expanding the amount of communication surrounding monetary policy.
Kevin Warsh is taking the opposite approach.
At the Fed’s latest press conference, Warsh answered questions with a median response of roughly 135 words and wrapped the entire briefing in about 30 minutes.
By comparison, Jerome Powell’s press conferences became substantially longer during and after 2020, with lengthy answers and extensive forward guidance becoming a major part of how markets interpreted policy.
Warsh has argued for years that the Fed communicates too much, and his approach as Chair is now putting that philosophy into practice.
Less forward guidance. Shorter answers. More emphasis on the actual policy decision.
But there is an important counterpoint: fewer words do not necessarily mean less Fed influence.
Markets may simply assign more weight to every sentence Warsh does say, dissecting a shorter message even more aggressively for clues about the next move.
In that sense, cutting the word count may change how the Fed communicates without reducing how intensely markets listen.