Kevin Warsh's Fed Chairmanship: Opposition to Central Bank Communication and the Legacy of Michael Woodford
By
Mike Konczal
Summary
The article analyzes Kevin Warsh's approach as the new Fed chair during his first FOMC meeting and press conference, focusing on his opposition to forward guidance and central bank communication. It contrasts his views with historical debates about monetary policy communication, particularly referencing Michael Woodford's work on central bank transparency. The piece argues that Warsh's push to reduce the Fed's role in reflecting markets back at themselves leads to confusing and indeterminate outcomes, drawing on forgotten debates about the proper scope of central bank communication.
Source
bskyKevin Warsh's Fed Chairmanship: Opposition to Central Bank Communication and the Legacy of Michael Woodfordnewsletter.mikekonczal.comKey quotes
· 4 pulledThe efficiency of the ketchup market is the best established fact in empirical economics.
The new Fed chair argued that the Fed should stop reflecting markets back at themselves.
Forgotten debates show how this leads to confusing, indeterminate results.
Trimming down a bloated FOMC policy statement is good.
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