Warsh: The Fed Needs a Completely New Inflation Framework

Odaily News Nominee for Federal Reserve Chairman Warsh stated that if appointed and in charge of the Fed, he would promote comprehensive reforms in policy-making. Warsh told the Senate Committee: "In my view, the Federal Reserve needs fundamental policy reforms. The mistakes made in dealing with inflation during the COVID-19 pandemic necessitate such reforms, and I believe this means a change in the way policies are implemented. I think this means a need for a different, completely new inflation framework." Warsh said we need new tools, we need new ways of communication, mentioning forward guidance, economic forecasts, and the dot plot. He said the Fed should wait until the meeting to issue statements because forecasts can hinder decision-making. (Jin10)