Warsh begins Fed revamp with new task forces and policy review

Federal Reserve Chair Kevin Warsh used his first press conference as the central bank's leader on Wednesday to announce a broad review of the institution's policies and operations, unveiling five new task forces while emphasizing the Fed's commitment to price stability.

The announcement came after Federal Reserve officials unanimously voted to leave the benchmark federal funds rate unchanged at a range of 3.5% to 3.75%.

The decision marked the fourth consecutive meeting in which policymakers kept rates steady.

Financial markets reacted negatively following the decision, with Treasury prices falling, the US dollar strengthening, and stocks moving lower.

Fed launches broad review under Warsh's leadership

Warsh said the Federal Reserve will establish task forces in five areas that he considers central to the conduct of monetary policy.

"I'm appointing a task force in each of five areas that are central to the broad conduct of monetary policy: first, Fed communications; second, the Fed's balance sheet; third, our use and reliance on existing data sources; fourth, productivity and jobs in an era of transformation; and last, the Fed's inflation frameworks," Warsh said as he held his inaugural press conference as chair following a two-day meeting of the Fed committee that sets benchmark interest rates.

"These subjects are timely, consequential, and in my view, worthy of a fresh look."

Warsh said he expects most, if not all, of the task forces to complete their work by the end of the year.

He added that he is still "recruiting and finalizing them" and that they will begin work "in the next couple of weeks" and provide "framing of how they see things starting in the fall."

The meeting also signaled a notable change in Federal Reserve communications.

The post-meeting statement was substantially shorter than recent releases and removed language that had previously suggested an easing bias toward future rate cuts.

Chair questions existing economic data and forecasts

Warsh also expressed concerns about the government's reliance on traditional economic data collection methods.

He told reporters that some of the data used by the Federal Reserve and other government agencies depends on "old-fashioned survey methods" that bear little resemblance to the economy in 2026.

The new task force, focused on data, will examine these issues, he said.

Warsh noted that many private-sector executives rely on real-time information that is subject to fewer revisions than government economic reports, which are frequently updated after initial publication.

He also indicated that changes could eventually be made to the Federal Reserve's Summary of Economic Projections, including the closely watched "dot plot" of interest-rate forecasts.

Warsh confirmed that he did not participate in Wednesday's Summary of Economic Projections.

Markets digest sweeping changes

During the press conference, Warsh acknowledged that investors were facing a significant amount of new information.

"It's a lot of change for financial markets to digest," says Warsh, adding however, that the most important thing for markets and households to know is that the Fed will deliver on price stability.

Later, he added, "This is a lot of change for financial markets to digest. I wouldn't be particularly intrigued by how they react in the first several minutes, or even first several days. What I think is most important is that financial markets, and at least as important, households and businesses know that this central bank will deliver on price stability."