Warsh Fails to Deliver on Inflation-Fighting Promise

Kevin Warsh, the current Federal Reserve Chair, took over in May of this year and promised to conduct monetary policy differently from his predecessors. He vowed a 'regime change' at the Fed to tackle inflation, focusing on low and stable inflation rather than boosting employment.

With headline inflation at 3.5% over the past 12 months (as of June) and core inflation at 2.6%, Warsh's plan is to examine areas central to monetary policy through five task forces he's created. These task forces include reviewing communications, balance sheet policy, data quality, productivity and jobs, and inflation frameworks.

However, the results of these task forces won't be released until the end of the year, leaving investors struggling to understand how Warsh plans to achieve his goal of defeating inflation. Ed Yardeni, an insightful observer of the Fed, notes that Warsh is overly secretive about what his reform plans entail.

Despite elevated inflation and calls for the Fed to raise rates in response, the Federal Open Market Committee held its target rate steady at both meetings presided over by Warsh since he took office.