Kevin Warsh has been Fed chairman for less than nine weeks, as he was keen to note several times in his press conference Wednesday. In that short tenure, we’ve learned that he’s a reticent guy. The word counts of the Federal Open Market Committee’s press releases have been slashed in half. He eschews any form of forward guidance that markets and business leaders have come to rely on under previous central bank leaders.
It’s an interesting approach for someone whose primary job is communicating and managing economic expectations. Critics didn’t hold back.
“All spin, no delivery,” wrote Dario Perkins, managing director at TS Lombard. Even within the briefing room, reporters seemed perplexed by some of Warsh’s statements. “No change to rates, no forward guidance for the average household. I guess, what was the news?” asked NBC’s Brian Cheung.
Over the course of his 45-minute press conference Thursday, many viewers (including CNN reporters and editors) bristled at Warsh’s penchant for catchy turns of phrase that don’t quite … make sense.
For example:
“Uncertainty, however, does not mean a lack of clarity.” Here, Warsh was explaining the Fed’s “just the facts” approach that will steer clear of forecasting — “a choice we consider especially potent at these uncertain times.” Respectfully, though, Chairman Warsh: Uncertainty does mean lack of clarity.
“This is a period of watchful thinking, not watchful waiting.” Asked about the “family fight” in which three Fed officials dissented, Warsh said the broader discussion showed agreement on the “hard questions” but with “different leans on the answers. “But my own judgment is this is a period of watchful thinking, not watchful waiting.” Honestly, your guess is as good as ours on this one.
“I wouldn’t characterize what we did is anything like a pause. I would characterize what we did as a rigorous review of the economic situation.” The Fed didn’t lower rates or raise them. It held steady. It’s taking a beat. It is, in other words, on pause.