A Fed chair without credibility makes controlling inflation and lowering interest rates more difficult.
“When the Fed chair lacks credibility with the markets and the American public, it becomes even more difficult to bring inflation under control and interest rates down.”
A new Fed chair's Jackson Hole speech sets the interpretive framework that will be applied to economic data for the following year.
“New chairs use this stage to set the frame for their tenure, and whatever language he establishes Friday gets applied to every data print for the next year.”
Warsh says the updates reflect five years of economic lessons to enhance policy effectiveness and accountability.
“Today's updates reflect lessons from the economy over the past five years, and are intended to enhance the transparency, accountability, and effectiveness of monetary policy.”
Warsh announces the updated consensus statement emphasizes promoting maximum employment and stable prices across broad economic conditions for all Americans.
“The updated statement, also commonly known as the consensus statement, emphasizes that the FOMC's monetary policy strategy is designed to promote the congressionally-assigned goals of maximum employment and stable prices across a broad range of economic conditions for the benefit and well-being of all Americans.”