Keep pulling the thread on Fed Holds Rates Steady As Warsh Takes Helm.
Following the FOMC meeting, the 2-year Treasury yield rose by 13 basis points to 4.18%.
Federal Reserve Chair Kevin Warsh is appointing five task forces to review Fed communications, the Fed's balance sheet, data sources, productivity and jobs, and inflation frameworks.
Fed Chair Kevin Warsh believes financial markets perform best when they react to incoming economic data directly, rather than trying to predict the Federal Reserve's reaction to that data.
Fed Chair Kevin Warsh stated that the Federal Reserve has missed its inflation target for five years and is committed to fixing that.
Nine members of the FOMC are now in favor of an interest rate hike, a number substantially higher than the market expectation of three to six members.
For the first time, the Federal Reserve did not disclose the vote count for its policy decision, a move Jim Bianco suggests is by design to present a more unified front.
The Federal Reserve statement under new Chair Kevin Warsh was 132 words, a significant reduction from the 341 words in the April FOMC statement under Jerome Powell.
The 30-year Treasury yield fell by 2 basis points following the FOMC meeting, contributing to a significant yield curve compression.
Fed Chair Kevin Warsh expects the new monetary policy task forces to begin work in the next couple of weeks, provide initial information in the fall, and conclude their work by year-end.
Jim Bianco of Bianco Research believes the Federal Reserve's communication style, which is about 20 years old, needed to change as the world and the Fed's role have evolved.
Jim Bianco of Bianco Research believes the Federal Reserve should follow the market, which expresses the collective wisdom of crowds, rather than summarily deciding on policy.
Kate Moore of Citi believes Fed Chair Kevin Warsh's comment about focusing on the 'left of the decimal point' for the inflation target reaffirms a commitment to a 2% goal, not '2 and something'.