Fed Officials Fill Warsh’s Guidance Vacuum as Rate Views Shift Toward 1 Hike
Updated
Updated · POLITICO · Jul 2
Fed Officials Fill Warsh’s Guidance Vacuum as Rate Views Shift Toward 1 Hike
3 articles · Updated · POLITICO · Jul 2
Summary
Fed officials are increasingly shaping market expectations themselves as Chair Kevin Warsh withholds forward guidance, leaving investors to parse a wider range of public rate views.
Neel Kashkari said he moved from expecting 1 rate cut in March to 1 rate hike by year-end in June, while Beth Hammack warned persistently high inflation could require higher rates.
John Williams said current policy is “well-positioned” to return inflation to the Fed’s 2% target, but the broader tone across officials in recent months has turned more hawkish.
Warsh skipped submitting his own forecast at last month’s Fed meeting, and analysts say the resulting vacuum is pushing markets to infer policy from colleagues such as Christopher Waller, who speaks again Monday.
Investors and strategists expect zero guidance to be hard to sustain, though some see a multi-year transition as markets adjust to a less transparent Fed.