Fed cuts rate votes to seven next year in Warsh's first big format change
The Federal Reserve will set interest rates at seven meetings next year instead of eight, Chair Kevin Warsh said, carving out one of its eight annual gatherings for a discussion of monetary policy strategy where no rate vote will be taken and no policy statement issued.
Speaking at his post-Federal Open Market Committee press conference, Warsh said the strategy session would take place next autumn and that he expects the committee to cut the number of policy-setting meetings to six in 2028. He argued the change is "more than some administrative detail", saying it gives an intellectually diverse committee room to think about longer-horizon questions rather than only the near term.
"Getting policy right involves assessing near-term developments at timely, regular, and information-rich intervals," Warsh said. "But it's equally important we reserve time and space as an intellectually diverse group for strategic deliberations." He said the decision followed a "robust discussion" spread across several meetings, and that it is not yet settled how information from the strategy session will be published or when. Minutes currently appear three weeks after each meeting, with full transcripts five years later.
The shift is the first concrete change to the Fed's conduct under Warsh, who in his first month convened five task forces covering communications, the balance sheet, the inflation framework, data collection and productivity and the labour market. He said he has held "some periodic check-ins" with the groups and expects "some but not all" to finish by his year-end deadline, adding that their findings would only begin a longer reform debate.
The committee held rates steady this week. Warsh said inflation remains above the Fed's 2% target but that policymakers chose to gather more information rather than raise rates for a second month running, and that September's quarter-point increase is already tightening financial and credit conditions. He rejected any suggestion that the midterm elections influenced the decision: "Politics played no role in the decision." Governor Lisa Cook and Cleveland Fed President Beth Hammack dissented in favour of a hike.
