The fed meeting schedule may change after reports said Kevin Warsh is weighing six rate-setting meetings a year instead of the current eight.
The New York Times reported on Friday that Warsh raised the idea internally, citing four people familiar with the matter. Meanwhile, Bloomberg said he discussed a structure with six meetings for rate decisions and two others for broader economic issues. According to the Times, the Federal Reserve could decide on a new calendar before its September meeting.
Warsh would not need congressional approval for the change. The Federal Reserve Act requires at least four meetings a year for the rate-setting committee. However, the Fed has held eight meetings a year since the 1980s, and it has already posted tentative meeting dates for next year on its website.
Fed Meeting Schedule and Process
The current setup triggers weeks of staff work before each meeting. Staff prepare analysis, briefing books, and public communications for all eight sessions. Therefore, a smaller number of meetings would reduce that workload and free up staff resources tied to the present schedule.
The proposal also matches a broader pattern in Warsh’s approach. The source article said his time as chair has featured a more restrained communication style and less public discussion of his own policy views than some predecessors. As a result, markets could rely more on economic data releases than on Fed comments between meetings.
Fewer Meetings Could Limit Flexibility
However, fewer scheduled meetings would also reduce the Fed’s regular chances to change interest rates. If inflation rises fast or the labour market weakens sharply between sessions, the central bank would need to wait or call an unscheduled emergency meeting.
That shift could also affect how markets price the pace of policy changes. With fewer set dates for action, the gap between economic surprises and Fed responses could widen. Additionally, traders may need to rethink the role of emergency meetings if the proposal moves closer to a decision before September.
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Source: InvestingLive
