Fed's Clarity Problem Persists Under Warsh

The Federal Reserve's communication strategy has come under scrutiny since Kevin Warsh took over as chairman. The problem, however, seems to have worsened during his tenure. Recently released inflation data for August did little to alleviate concerns about the Fed's ability to hit its 2% target.

Consumer prices rose 3.4% year-over-year in August, while excluding food and energy, they increased by 2.4%. This was worse than forecasters had predicted, leading investors to price in a 90% chance of a policy rate hike on Wednesday.

To address these issues, Warsh needs to rethink his approach to explaining the Fed's stance after the next meeting. He'll have to provide clarity rather than certainty on where things stand, which has been lacking until now.