Rate actions by central bank monetary policy committees have a way of grabbing eyeballs. So, it was at the US Federal Open Markets Committee (FOMC) meet chaired by Fed chair Kevin Warsh last month. In the will-he-wont-he-cut-rates debate in the run-up to the meet, talk was mostly about whether he'd be Trump's 'sock puppet' and cut rates, or show he's his own man and hold rates as warranted by macroeconomic fundamentals. (A hike was never on the cards. )
It was no surprise then that, even as markets and central banks breathed easy when the Fed kept rates unchanged, attention remained focused on future rate actions. Not on another pet theme of the new Fed chair-a reversal of how monetary policy is communicated, from greater openness to a less-is-more idiom. In a throwback to the days of former Fed chair Alan Greenspan, the policy statement was markedly shorter. It omitted forward guidance, and though there was a 'Summary of Projections' as usual, Warsh desisted from providing his projections.
