Warsh pushes Fed to "talk less," officials warn it could worsen market volatility

PANews October 15 news: Federal Reserve Chairman Kevin Warsh is pushing to adjust the Fed's communication mechanism, advocating reducing public hints about the future interest rate path, and considering weakening or even canceling the quarterly interest rate dot plot, instead letting the market judge the direction of policy on its own based on economic data.

However, this new policy, which champions silence, had barely been tested when it stirred up a surging wave of opposition within the Federal Reserve. Many policymakers said bluntly that the central bank's responsibility to manage expectations is indispensable, and deliberately keeping silent not only fails to bring rationality, but instead causes the market to frequently fall into violent turbulence due to the lack of a reference framework. As U.S. September CPI rose to 3.7% year-on-year, the market still has differences in its judgment of the subsequent rate hike path, and the related debate also highlights the question of how the Federal Reserve can balance policy transparency with autonomous market pricing.