Kevin Warsh will cut rate-setting meetings. Eight a year becomes seven in 2027. Six in 2028. The other two become "strategy" meetings, with no vote and no policy statement.
The Fed has run eight meetings a year since 1981. Warsh ended that streak to make room for "thinking anew about big questions." Wall Street heard "fewer chances to be right."
Retail traders just lost a hobby. Fewer meetings means fewer Wednesdays at 2 p.m. spent screaming at a ticker. Fewer chances to buy call options expiring that same afternoon. Fewer chances to type "pivot" in all caps.
The Fed also held rates at 3.75% to 4%. Lisa Cook and Beth Hammack wanted a hike. Cook had never dissented in four years. Now she has, and it took a central bank reorganizing its calendar to get her there.
Warsh also repeated that he does not believe in forward guidance. So the Fed will meet less often and tell you less about it. That is the most honest thing a central bank has ever done.
A strategy meeting has no vote and no statement. Picture it. A conference room. Seventeen economists. Muffins. Nothing happens, and the transcript is somehow still 90 pages.
My charts did not move. My charts have never moved for a Fed meeting. The line goes where the line goes. Jerome Powell could be replaced by a Roomba, and support would still hold at the same level.
Some of you spent 2023 trading the dot plot like it was scripture. Now Warsh is taking away the dots, the guidance, and the meetings. You are being slowly weaned off the only thing you believed in.
The Fed will sit quietly and think about big questions. You will sit quietly and think about your margin balance.
Photo by Rogelio Gonzalez on Unsplash
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