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There is some speculation that Kevin Warsh won’t give much forward-looking policy indications at all…
That is because he’s previously said he doesn’t think forward policy signals like this are useful outside of economic crises. So what will he say?
This speech could focus on bigger issues, such as how he plans to run the world’s most important central bank, and also what changes he will make and when.
While not offering direct guidance on the future of interest rates, everything he says will be scrutinised by investors, and changes that he plans to make could still trigger market volatility.”
That leaves him a few options for today. According to our US economists, they think that a ‘big-picture’ speech could include a discussion of the Fed’s taskforces, or potentially on AI’s economic impact.
Alternatively, the ‘more traditional’ speech might see Warsh do a ‘cleanup’ of the July press conference, and he may wish to counter one market narrative that Fed policy actions could be delayed until the task forces have completed their work.”
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