Fewer Fed Meetings Raise Stakes of Warsh’s Communications

Résumé détaillé

The Federal Reserve will vote on interest rates less frequently beginning next year as part of a plan by the central bank’s chairman, Kevin M. Warsh, to overhaul how it operates.

When officials at the Federal Reserve meet next month to vote on interest rates, they will have only a partial snapshot of the economy in hand. Fresh inflation data comes out the day after policymakers finalize their rate decision, leaving them without insight into whether price pressures in November continued to accelerate or showed signs of easing.

This predicament underscores why officials at the central bank broadly appear on board with a plan hatched by Kevin M. Warsh, the Fed chairman, to reduce the number of meetings convened each year to vote on interest rates.

The changes will be ushered in gradually, beginning next fall. In a revised schedule released on Thursday, the Fed confirmed that its policymakers will meet eight times in 2027, but that the Oct. 25-26 gathering will be “dedicated to the discussion of broad monetary policy strategy issues.”

By 2028, there will be just six meetings accompanied by policy votes, with two others focused on strategy.

Meeting less frequently, and at more evenly spaced intervals, has the clear benefit of giving officials a more consistent flow of economic data to parse when they gather to debate their policy settings. But there are trade-offs that will put more onus on Mr. Warsh to communicate openly about how the Fed is approaching its rate decisions and its thinking about the outlook, something he has so far resisted even as the central bank has embarked on raising rates this year.

“The decision process is more important than the timing,” said Esther George, who served as president of the Federal Reserve Bank of Kansas City from 2011 to 2023. “And this committee is struggling a bit with how to communicate what exactly they mean.”

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