New Fed Chairman Kevin Warsh Wants to Break 2 FOMC Practices From the Last 15 Years, and It Could Be Bad News for Stock Investors Kevin Warsh plans to shake up the Federal Reserve under his chairmanship.
Not only is he coming in with a monetary policy agenda that could depart from his predecessor’s efforts, but he also has an opposing view on a couple of other FOMC (Federal Open Market Committee) policies from the past 15 years
And if he gets his way, it could create a lot of volatility in the stock market, especially given that valuations for the S&P 500 (SNPINDEX: ^GSPC) and the Nasdaq Composite (NASDAQINDEX: ^IXIC) are at such high levels. Warsh wants to change the Fed’s communication policies, but doing so could have serious repercussions for financial markets. Breaking the lines of communication The Federal Reserve Chairman has been hosting press conferences after select FOMC meetings and rate decisions since 2011.
Then Chairman Ben Bernanke aimed to provide greater transparency and answer the press’s questions. Chairman Powell increased the frequency of those press conferences to provide additional information after every FOMC meeting. In 2012, Bernanke introduced the dot plot, which is released after every other FOMC meeting.