Warsh Faces Communication Test at Jackson Hole

Federal Reserve Chairman Kevin Warsh's rejection of forward guidance has led to increased market volatility, according to DBS Bank strategist Philip Wee.

The Kansas City Fed's Jackson Hole Economic Policy Symposium on August 27-29 is seen as an important test for Warsh, who must explain how a Fed without forward guidance intends to anchor expectations and set policy boundaries with the Treasury.

Wee warns that without a clear framework, reduced guidance could be seen less as a return to market price discovery and more as a source of uncertainty for financial conditions and Fed independence.