Today’s is the big debut for new Fed Chairman Kevin Warsh, as he wraps up a two-day meeting with the FOMC.
The result is a foregone conclusion — rates will stay in the 3.50-3.75% range
What’s less certain is how the statement will read. In the last meeting, three voting members dissented regarding the language in the statement that suggested an easing bias, which is a reference to the “additional adjustments to the target range for the federal funds rate” line. What I suspect is that Warsh will tear up the old statement completely in order to try to disassociate from that sticking point without introducing a new bias.
The risk in that is the statement will read neutral, which the market might see as a hawkish shift. That will set the stage for Warsh’s first press conference and that will be the real test. Warsh will repeatedly be asked about inflation and about his prior dovish stance.