Federal Reserve Chairman Kevin Warsh on Wednesday held firm on his new policy against offering signals of where rate policy is heading, but did signal that his plans for proposed reforms are set to move forward next week.
In a policy panel at the European Central Bank's annual Forum on Central Banking 2026, Warsh said that he's received positive feedback on his plan to establish task forces to review Fed communications, the balance sheet, economic data usage, productivity and jobs, and inflation frameworks.
"We all want to make the best decisions we can. We've all been burdened with many of the policies that, in some sense, the Fed created in the 2008 financial crisis. This is a rare moment for us to go back to first principles, ask hard questions, review what we're doing at the Fed," Warsh said.
Warsh said he plans to have an announcement next week who will be the outside experts leading these task forces. "Some of them would have been folks in seats like this in prior years. Some would have been academics in the audience, but we really tried to find the best minds in economics, " Warsh said.
This is breaking news. Read a preview of Warsh's expected remarks below and check back for more analysis soon.
Federal Reserve chairman Kevin Warsh will follow in his predecessor's footsteps and participate in the European Central Bank's annual policy conference on Wednesday, where he's expected to continue to provide assurances that taming inflation is a priority.
Warsh will be participating in the annual policy panel at the ECB's Forum on Central Banking 2026 in Sintra, Portugal, on Wednesday at 9 a.m. Eastern. Bank of England Gov. Andrew Bailey, ECB President Christine Lagarde and Bank of Canada Governor Tiff Macklem also will be participating in the panel.
Fed watchers expect that Warsh will provide much of the same remarks and tone that he adopted during his first press conference following the Federal Open Market Committee meeting on June. 17. At the briefing, Warsh stressed the importance of price stability and significantly limited the practice of providing forward guidance previously used to signal officials' next steps on rate policy.
Investors should expect central bank communications and the use of forward guidance to be big parts of Wednesday's panel discussion. One reason is that other central banks in the room are likely more sympathetic to some of the points that Warsh has been making about communicating less and providing less forward guidance, says Robert Sockin, PGIM's chief U.S. economist.
In fact, ECB's Lagarde said Monday that she believed central banks no longer needed "complex forms of forward guidance." It could be telling how much Warsh signals his support of other banks' communication styles, especially with other central bankers debating best practices and how different approaches should evolve. But Sockin believes Warsh will stick to much the same messaging that he provided after the FOMC meeting.
Additionally, investors should expect Warsh to continue to employ the hawkish tone he displayed in the FOMC press briefing and continue to prioritize getting inflation under control.
"What I think is most important is that financial markets and, at least as important, households and businesses know that this central bank will deliver on price stability," Warsh said.
Given that oil prices have fallen another 10% since the FOMC meeting, Warsh may get some questions on what lower prices mean for overall inflation in the coming months. Expect Wash to continue to sound hawkish. That commitment to price stability went a long way to dispel fears about a politicization of the Fed, says James Knightley, chief international economist at ING. But he expects some repeat of those remarks again at Sintra.
"While U.S. investors were, by and large, pretty confident that the usual 'checks and balances' would prevent that happening, I continued to get asked about it by European and Asian clients who are much less confident about the Fed being able to retain its independence," Knightley says.
So robust statements from Warsh that the committee "will deliver price stability" not only show where the focus lies right now, but also will likely appeal to European central bankers in the crowd on Wednesday, Knightley says.
Knightley adds that the European venue means Warsh will inevitably be asked about what fiscal policy has done to contribute to inflation pressures. His response could prove interesting, particularly in an environment where his June 17 comments boosted the market pricing of rate hikes and could cause President Donald Trump to bristle -- and the honeymoon period could quickly come to an end.
"You would think he will tread very carefully there," Knightley says.
There also will likely be questions on Warsh's announced plans to establish task forces to review Fed communications, the balance sheet, economic data usage, productivity and jobs, and inflation frameworks. But investors shouldn't expect too many new details.
Warsh also is unlikely to comment much on the recent Supreme Court ruling that blocked Trump from removing Gov. Lisa Cook from the Fed.
"It is hard to imagine the questions being too aggressive," Kinightley says. "Instead it will all be nicely stage managed with the other central bank heads all keen to help out the new guy."
Write to Megan Leonhardt at megan.leonhardt@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
July 01, 2026 09:47 ET (13:47 GMT)
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