Fed plans to eliminate some rate-setting meetings, chairman says

The Federal Reserve plans to eliminate some meetings devoted to setting interest rates in the next couple of years, Chairman Kevin Warsh said Wednesday.

Starting next fall, the central bank will dedicate one of its eight annual meetings to considering broad-based questions about the economy, rather than to voting on interest rates, Warsh said. That number will increase to two in 2028.

The chairman made the announcement following the release of the central bank’s latest policy announcement, which left rates unchanged.

He said the rationale for doing so was to devote more time to thinking about longer-term issues by shifting attention away from the immediate interest rate environment.

“Getting policy right involves assessing near-term developments at timely, regular and information-rich intervals,” he said. “But it’s equally important we reserve time and space as an intellectually diverse group for strategic deliberations, for thinking anew about big questions, looking out over longer time horizons.”

Warsh’s announcement marks a major shake-up for the Federal Reserve’s long-standing policy calendar, which is closely watched by investors around the world. The Federal Open Market Committee has held eight scheduled meetings a year since 1981.

Warsh began seriously discussing a reduction in rate-setting meetings in July, according to the FOMC’s meeting minutes, arguing that a longer lag between rate-setting meetings would allow the committee to accumulate more data about the economy.

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Reducing the number of rate-setting meetings has long been debated over concerns about shortsightedness — but the switch was never enacted over fears that the Fed would become less nimble in reacting to sudden changes in the economy.

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The change would make the Fed unique among major central banks, including the Bank of England and Bank of Japan.

It marks another major change enacted by Warsh, who took the reins of the Fed in May after being nominated by President Donald Trump.

Warsh has dramatically shortened the FOMC’s post-meeting policy statement. He has also declined to issue what is known as “forward guidance,” which contains forecasts about future inflation and unemployment.