Fed holds rates but Warsh offers no clues on way ahead

Kevin Warsh began his tenure as chairman of the Federal Reserve with a solemn vow to curb inflation and a clear sign that he plans to swiftly revamp how the US central bank does its job.

- Bloomberg

Missing was any clear guidance from him on what it means for interest rates.

Following the Fed’s two-day policy meeting, Warsh on Wednesday passed a critical litmus test with investors sceptical of his inflation-fighting commitment. Markets took to heart new projections from Fed officials showing many of Warsh’s colleagues now expect they'll need to raise rates at least once this year, sending Treasury yields higher.

Still, the new Fed chief avoided giving any signal on his own preferred rate path. In his first meeting at the helm, he instead downsized the Fed’s post-meeting policy statement and announced the creation of several “task forces” on monetary policy. Those steps marked his first efforts toward the “regime change” he has long sought at the central bank and eliminating the policy guidance he said hamstrung the Fed in recent years.