Fed Chair Kevin Warsh Mulls Cutting Policy-Meeting Frequency

At a policy-setting meeting in late July, Federal Reserve Chairman Kevin M. Warsh raised the possibility of reducing the number of regularly scheduled meetings at which the Fed’s 12-member policy committee decides interest-rate policy. According to the New York Times, Warsh indicated that a revised schedule could be settled before the next meeting in mid-September, even if any change would take effect later.

New York Times

The Federal Reserve has held eight scheduled meetings a year since 1981, a cadence instituted under former Chair Paul Volcker. Warsh, who assumed the chairmanship about two months ago on a platform promising “regime change,” has already shortened post-meeting policy statements and signaled a willingness to scale back the post-meeting news conferences that began in January 2019. The current discussion would represent the most consequential operational shift of his tenure, breaking a half-century of precedent.

New York Times

• Meeting frequency: eight scheduled meetings annually, unchanged since 1981.

New York Times

• Emergency meetings: unscheduled sessions have been convened during crises such as the early COVID-19 pandemic and the 2007-2009 financial crisis, typically via phone or in-person gatherings.

Reuters

• Tenure length: Warsh has chaired two meetings at the time of the proposal.

New York Times

The Federal Reserve declined to comment on the proposal when approached by reporters.

New York Times

If adopted, fewer scheduled meetings would reduce the regular flow of information about the Fed’s view of inflation, the labor market, and overall economic conditions. This could make monetary policy less responsive to evolving data and reverse a decades-long trend toward greater transparency, affecting both market participants and the broader public’s understanding of the central bank’s actions.

Reuters