Fed Chair Warsh says inflation trends have not meaningfully improved despite better PCE and CPI readings, calls for a quieter Federal Reserve.
Macro & Markets ·
Fed Chair Kevin Warsh acknowledged that recent PCE and CPI readings came in better than anticipated, yet maintained that underlying inflation trends have not meaningfully improved. Rather than laying out a specific interest-rate path or policy framework, Warsh called for a "quieter Fed" that reduces reliance on forward guidance and signals that markets should not treat the central bank as the primary driver of their trading decisions.
Warsh's comments reflect a tension between near-term data improvements and persistent concerns about deeper inflation dynamics. By avoiding a committed policy reaction function while simultaneously advocating for reduced Fed communication, he suggests the central bank should step back from its recent posture of guiding market expectations through forward guidance.
The remarks leave open what operational changes, if any, the Fed might pursue to become "quieter," and whether other policymakers share this view on the adequacy of recent inflation readings as evidence of meaningful trend improvement.