The Federal Reserve plans to eliminate some meetings devoted to setting interest rates in the next few years, Chairman Kevin Warsh said Wednesday.Starting next fall, the central bank will dedicate one of its eight annual meetings to considering broad-based questions about the economy, rather than to voting on interest rates, Warsh said.That number will increase to two in 2028.
The chairman made the announcement following the release of the central bank’s latest policy announcement, which left rates unchanged.He said the rationale for doing so was to devote more time to thinking about longer-term issues by shifting attention away from the immediate interest-rate environment.“Getting policy right involves assessing near-term developments at timely, regular, and information-rich intervals,” he said.
“But it’s equally important we reserve time and space as an intellectually diverse group for strategic deliberations, for thinking anew about big questions, looking out over longer time horizons.”Warsh’s announcement marks a major shakeup for the Federal Reserve’s longstanding policy calendar, which is closely watched by investors around the world.The Federal Open Market Committee has held eight scheduled meetings a year since 1981.Warsh began seriously discussing a reduction in rate-setting meetings in July, according to the FOMC’s meeting minutes, arguing that a longer lag between rate-setting meetings would allow the committee to accumulate more data about the economy.
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