Warsh Eyes Smaller Fed Footprint Through Fewer Meetings

Federal Reserve Chairman Kevin Warsh is considering reducing the number of scheduled FOMC meetings, according to Barclays analysts Michael McLean and Jonathan Millar. The current eight-meeting calendar has been in place since 1980, when then-Chairman Paul Volcker cut the schedule from ten meetings to eight.

Warsh reportedly wants a Fed that plays a smaller role in markets, which could be achieved by reducing the number of meetings. This would allow the committee to focus on more important issues and reduce market dependence on Fed signaling. However, Barclays warns that this approach may have unintended consequences, such as making each remaining meeting more consequential and intensifying market focus on individual decisions.

The analysts note that a change in the meeting schedule is not expected before next year and would likely require broad committee support. They also suggest that Warsh's proposal reflects a broader effort to rethink the central bank's role in financial markets, including communications, balance-sheet policy, and the degree to which the Fed should shape asset prices and market expectations.