Warsh Pushes Markets Towards Traditional Fed Communication

IBM Vice Chairman Gary Cohn has stated that Federal Reserve Chair Kevin Warsh is attempting to reduce the market's reliance on central bank guidance and encourage investors to make decisions based on economic data. According to Cohn, investors have become accustomed to the Fed clearly signaling its plans after the 2008 financial crisis.

Cohn said that markets had become overly dependent on Fed signals, making them 'addicted' to guidance. He added that Warsh is steering the central bank back to a more traditional style of policymaking that relies less on forward guidance and more on market interpretation.

Warsh has taken a different approach since becoming Fed chair earlier this year, repeatedly declining to provide detailed forward guidance and stating that policy decisions will depend on incoming economic data. He is reportedly considering reducing the number of the Fed's policy meetings as part of a broader effort to reform the central bank.