Barclays rate strategists said in a report that Federal Reserve Chair Warsh may argue for using less forward guidance, on the view that it was one source of past policy mistakes. They also said Warsh could share views on balance sheet policy at the Kansas City Fed’s annual Jackson Hole symposium, scheduled for Aug. 27 to 29. Barclays expects him to focus on longer-run drivers of the economy as well, especially productivity trends and what they mean for potential growth.
The strategists do not expect Warsh to provide near-term policy guidance. Even so, markets will be looking for more clarity on how the Federal Open Market Committee plans to bring inflation back to its 2% target. Barclays added that if inflation does not improve, Warsh would likely reaffirm that rate hikes remain a possible option. The report was cited by Jin10, according to Odaily.
Barclays rate strategists said in a report that Federal Reserve Chair Warsh may favor reducing the Fed’s use of forward guidance, arguing that it was a source of past policy mistakes.
They said Warsh could also offer views on balance sheet policy at the Kansas City Fed’s annual symposium in Jackson Hole, set for Aug. 27 to 29.
Barclays expects him to highlight longer-term drivers of the economy, especially productivity trends and their effect on potential growth. The strategists said Warsh is unlikely to provide near-term policy guidance, though markets will be watching for more detail on how the Federal Open Market Committee, or FOMC, plans to return inflation to its 2% target.
If inflation fails to improve, Warsh would likely confirm that rate hikes remain a possible option. Odaily cited Jin10 for the report.
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