Here are the five big takeaways from Kevin Warsh’s first meeting as Fed chairman

The Federal Reserve and Governor Kevin Warsh are keeping a close eye on the scenario for interest rates on Wednesday, voting to keep the benchmark level steady but eliminating many of the surprises that have kept markets guessing where things will go. The markets did not like the fact that the major averages fainted after the meeting and Warsh spoke at the press conference.

Here are the five biggest results:

1. No change in interest rates but hawks are returning: There was no significant opposition to keeping the federal funds rate in the 3.5%-3.75% range. However, the “dot plot” of expectations showed an upward trend later this year. The Federal Open Market Committee was split 9 to 9 between those expecting flat rates or a cut and those expecting at least one increase; the median “dot” indicates a quarter-point increase.
2. Dot mystery solved: There was widespread speculation that Warsh would not present a single point at the meeting, and Warsh confirmed that he did not. In the past, the president has expressed disdain for such “forward guidance” that constrains future policy. “It is the practice of this committee for participants to present these projections, and I have encouraged my colleagues to continue to do so. But I have refrained from presenting my own projections that are consistent with my long-held views on the SEP, at least as it is currently structured,” he said.
3. Regime change through task force: Warsh was promising to turn things around at the Fed, and his first steps in doing so were taken with the announcement of five task forces. They are tasked with examining communications, the Fed’s balance sheet, the data sources it relies on, productivity and employment, the impact of artificial intelligence and other transformative technologies, and the central bank’s approach to inflation.
4. Tough against inflation: Warsh used the term “price stability” about a dozen times. For a president who has frequently weighed in on lowering interest rates, it was a surprisingly hawkish speech about his and the committee’s “clear and unanimous” determination to control inflation. Markets responded in kind, being sensitive to policies 2-year Treasury yield It rose 14.4 basis points.
5. Brevity is the soul of intelligence and monetary policy: Warsh also promised renewed communication, and the first visible step was a dramatically abbreviated post-meeting statement. Before the new president’s arrival, statements often exceeded 300 words of standard language that investors closely scrutinized. This time: The description was just 130 words long, short and sweet, with little ambiguity.

“We believe that today the Federal Reserve’s FOMC has ushered in a new era of monetary policy in the United States.” — Rick Rieder, head of fixed income at BlackRock.

“New Fed Governor Warsh resembled former hawkish Fed Governor Warsh, who in today’s press conference repeatedly reiterated the need for the Fed to fulfill its price stability mandate” — Krishna Guha is head of central bank strategy and economics at Evercore ISI.

” [task force] “The announcements indicate an institution is under active review rather than in a dormant state, and investors should expect the Fed’s operating framework to look significantly different during Warsh’s tenure than it did under his predecessor.” Jason Pride, head of investment strategy at Glenende.

“Warsh wants his first impression to be ‘reformer.’ We’ll see what that means later this year. In terms of the policy outlook, it’s gotten harder for the Fed to watch.” — Dario Perkins, global macro managing director at TS Lombard.