Warsh: The Fed Needs a New Inflation Framework

Nominee for Federal Reserve Chair, Warsh, stated that if appointed and leading the Federal Reserve, he will push for a comprehensive reform in policy-making. Warsh told the Senate committee, "In my view, the Federal Reserve needs fundamental policy reform. Errors in addressing inflation during the COVID-19 pandemic require such reform, I believe this means a shift in policy implementation. I think this means a need for a different, brand new inflation framework." Warsh said we need new tools, we need new communication methods, he mentioned forward guidance, economic forecasts, and dot plots. He said the Federal Reserve should wait until the meeting to issue a statement, as forecasts could hinder decision-making.