By Salma El-Sakka
The Federal Reserve plans to eliminate some interest rate-setting meetings starting next fall, Chairman Kevin Warsh announced Wednesday. The central bank will dedicate one of its eight annual meetings to broader economic questions rather than voting on rates, increasing to two in 2028.
Shift in Policy Calendar
The change marks a significant shift from the long-standing policy calendar of eight scheduled meetings per year since 1981. The Federal Open Market Committee will reduce its rate-setting sessions to allow more time for strategic deliberations.
Rationale for Change
Warsh said the rationale is to devote more time to longer-term strategic thinking. He emphasized the need for timely assessments of near-term developments but also reserved space for intellectual diversity on big questions over longer horizons.
Historical Context
Reducing rate-setting meetings has been debated for years but never enacted due to concerns about the Fed's ability to react quickly to economic changes. The move would make the Fed unique among major central banks, including the Bank of England and Bank of Japan.
Warsh's Leadership Changes
Since taking the helm in May after being nominated by President Donald Trump, Warsh has implemented other changes, including shortening the FOMC's post-meeting policy statement and declining to issue forward guidance on inflation and unemployment forecasts.
