Barclays: Warsh May Advocate Reducing Use of Fed Forward Guidance, Unlikely to Provide Near-Term Guidance

TechFlow reports that on August 24, Barclays rate strategists stated in a report that Fed Chair Waller may advocate for reducing the Federal Reserve's reliance on forward guidance, as he considers forward guidance a source of past policy missteps. The strategists noted that at the Kansas City Fed's annual symposium in Jackson Hole from August 27 to 29, Waller may also offer insights into balance sheet policy.

They expect Waller to further emphasize the economy's long-term drivers, particularly productivity trends and their impact on potential growth. While Waller is unlikely to provide near-term policy guidance, the market will seek additional information on how the FOMC plans to bring inflation back to its 2% target. If inflation fails to improve, Waller is likely to confirm that rate hikes remain a feasible option. (Jinshi)