Fed Chairman Warsh's Radical Plan: Changing Market Expectations

US Federal Reserve Chairman Kevin Warsh is set to reshape the global financial world during his 4-year term. Warsh is preparing to implement a comprehensive transformation plan that will change the Fed's structure from top to bottom, rather than just focusing on interest rate decisions. At the Fed's last meeting, the federal funds target rate range was left unchanged, but internal disagreements emerged. Warsh avoided providing verbal guidance after the meeting, making it difficult for investors to make predictions about the future. Long-term US Treasury bonds came under selling pressure, and the 30-year Treasury yield approached its highest level since 2007. Warsh emphasized that the principle of price stability will not be compromised and highlighted that inflation has been above target for over 5 years. While investors began pricing in one or two interest rate hikes by the end of the year, Goldman Sachs Chairman John Waldron stated that criticism is premature. Kevin Warsh's vision includes changing the way economic data is read. Before becoming Fed chairman, Warsh developed AI bots, and he now aims to process real-time data flows from the retail and banking sectors using AI algorithms, rather than relying on delayed official data. 'The new Fed chairman's vision aims to change the way economic data is read.' Another proposed structural reform on the table is reducing the number of monetary policy meetings from 8 to 6 per year. This model aims to have policymakers analyze two months of economic data at each meeting, rather than just one month. Alternatively, the 8 meetings could be maintained, with 2 sessions dedicated to long-term strategic policies instead of interest rate decisions. 'The new chairman should be given time to implement his plans.'