Fed's Warsh Seen Resetting Communication Strategy at Jackson Hole

The Federal Reserve's inflation-fighting resolve has been called into question by Chair Kevin Warsh's communication strategy. TD Securities' Oscar Munoz believes that a reset in approach is necessary to restore credibility and centralize guidance.

Warsh's lack of clarity about how the Committee intended to lower inflation after the most recent FOMC meeting was seen as a key catalyst for market concerns over Fed credibility. A reset on strategy by the chairman, starting with the Jackson Hole Symposium later this month, is expected.

The event seems like an ideal platform for Chair Warsh to clarify the Fed's reaction function and policy framework. Forward guidance may be out of the picture, but providing information about the Fed's reaction function should not be.