New Fed chair Warsh withholds forward guidance for a second meeting

Federal Reserve Chair Kevin Warsh has now declined to offer forward guidance on the path of interest rates at two consecutive policy meetings. The approach marks a departure from the practice of recent Fed leadership, which used signals about the likely direction of policy to shape market expectations between meetings. Without that guidance, investors are left relying more heavily on incoming inflation and labour data to price the rate path, a set-up that tends to raise sensitivity to individual data releases. The Fed has not indicated whether the change in communication style is permanent.