Kevin Warsh aspires to be a Federal Reserve chair of few words. He doesn’t think the central bank should provide as much “forward guidance” about the path of interest rates as it has in recent years. He believes Fed policymakers should give fewer speeches and possibly hold fewer meetings. He wants the institution to own fewer assets and to leave a lighter footprint on the economy.
There are good arguments for this humble approach, but that silence could have a cost: Markets won’t know what to expect from Warsh and his colleagues in the future, which might undermine the credibility of the policies they’re pursuing today.