Warsh’s Jackson Hole Debut: Ending Forward Guidance, Restoring Fed Discipline

Warsh's Jackson Hole debut signals a deliberate break from the Fed's recent crisis-era playbook, framing forward guidance as a distortion rather than a tool. For markets, this could mean a return to higher volatility around data releases, as policy signals become less pre-committed. The emphasis on short-term rates and a 3.7% PCE suggests a hawkish bias remains, but the acknowledgment of AI's uncertain impact leaves room for debate on productivity. The key watch is whether his seven principles translate into actual voting behavior, especially if inflation cools faster than expected.