“This week’s FOMC meeting exemplified the best of the Fed traditions: vigorous debate, open-mindedness, commitment to mission, responsibility and accountability for performance… Getting monetary policy right — or as near to it as we can do. That is our North Star.”
The committee held the target range for the federal funds rate at 3.50%–3.75%.
Economic activity is “expanding at a solid pace,” with strong productivity, capital investment, and stable labor market, but inflation has run well above 2% for over five years.
On commitment to price stability:
“I’m pleased to report that members of the FOMC are unambiguous and unanimous that this committee will deliver price stability.”
On the new, shorter policy statement:
“It is a bit shorter, a bit simpler, and dispenses with some older language. It just gives you the facts, as best we can judge it.”
“Absent, also, is so-called forward guidance, which we agreed was not well suited to the current policy conjuncture.”
On the dot plot/SEP:
“It has been the practice of this committee for participants to submit these projections and I have encouraged my colleagues to continue to do so. I, however, have refrained from offering projections of my own.”
Median projections showed a slightly higher rate path, with nine officials seeing at least one hike in 2026.
On the five task forces (communications, balance sheet, data sources, productivity/jobs/AI, inflation frameworks):
“These subjects are timely, consequential, and in my view, worthy of a fresh look… They will have a straightforward charge: ask hard questions, examine current practice, consider alternatives.”
“Each task force will have an objective shared by everyone… A Federal Reserve that is clear-eyed about its mission, fit for purpose, and focused on the future.”
Key Q&A Quotes
On the 2% inflation target:
“That is the Federal Reserve’s long-held objective of 2%. The ‘two’ is the left of the decimal point. For now, ‘zero’ is to the right.”
“I see no reason until we have reestablished our commitment and ability to deliver on the 2% inflation objective to revisit that.”
On internal decision-making (“family fight”):
“We can agree to some of the recommendations, disagree with others, have a good family fight about it. But what comes from them will — I hope and believe — make the discussion we have internally better, stronger, more of a dialectic, so that we can finally deliver on that price stability objective.”
On inflation being a choice / commitment:
“The commitment to deliver is strong, unanimous, and unambiguous, and that’s I think an important message we’ve missed for five years, and we’re going to fix that.”
Warsh emphasized data-dependency, reduced forward guidance, and letting markets react to data rather than Fed signals.
He avoided locking in future rate paths and focused on long-term institutional improvements.
