Warsh to Take Cautious Approach at Jackson Hole

The Federal Reserve's Jackson Hole symposium is an event often shrouded in hype, but new research from Wells Fargo Economics suggests that only a handful of speeches have truly had a significant impact on monetary policy. Over the past 14 years, there have been only two consequential speeches: Powell's 'pain' speech in 2022 and Bernanke's hint at QE3 in 2012.

Wells Fargo expects Fed Chair Warsh to take a more cautious approach this year, focusing on elaborating the task force work, balance sheet options, and policy framework issues. This would be in line with Warsh's preference for saying less rather than more. The only thing that has some analysts questioning their expectations is the 'clean up' article published after the last FOMC presser.

Warsh has not yet outlined his near-term reaction function, and another round of inflation and employment data will be released before the next FOMC meeting on September 16. Revealing his leaning now could risk boxing in the Committee, which is a problem Warsh aims to avoid by paring back guidance.