Warsh's Concise Communication Sparks Central Bank Controversy

Kevin Warsh, the new chairman of the US Federal Reserve (Fed), has taken a more concise approach to communication at his first interest rate decision. The written statement was shortened, forward guidance was dropped, and the press conference was shorter.

This is not the first time central bank communication has caused controversy. Four examples from recent history illustrate this: in 2005, Alan Greenspan's phrase 'irrational exuberance' sent stock markets tumbling; in 2012, Mario Draghi's 'whatever it takes' pledge marked a turning point in the euro crisis.

Ben Bernanke inadvertently caused market turbulence after taking office with a comment at a gala dinner. Jerome Powell surprised markets twice in 2018: first by saying they were far from neutral interest rates, then by suggesting that was not the case.