Warsh Expected to Outline Strategic Direction at Jackson Hole

Market expectations for short-term interest rate guidance from Federal Reserve Chair Kevin Warsh at this week's Jackson Hole symposium may be overstated, according to a Morgan Stanley analysis.

The bank's chief US economist Michael Gapen and global head of macro strategy Matthew Hornbach argue that Warsh's approach will differ from previous Fed Chairs who have used the platform to signal upcoming policy shifts or reinforce market expectations.

They point out that Warsh has previously called for the Federal Reserve to reduce its communications and step back from providing explicit forward guidance, a preference they expect to shape his first major address as Chair.

Instead of focusing on near-term policy choices, such as whether the Fed will move at its September meeting or where rates are likely to sit by December, Warsh's remarks are expected to center around longer-term structural issues tied to working groups he has established since taking office.