Big Change Ahead at Fed, But Not What You Think

There is a new sheriff in town, and he is shaking things up! Yes, Kevin Warsh chaired his inaugural Fed meeting today, giving investors a first look at his style. To us, this is more significant than what his arrival means for monetary policy, which is always set by committee and tends to follow markets more than it steers them. Indeed, policymakers’ unanimous decision to hold rates was widely expected and a bit of a snooze. But communication is changing, and some headlines warn it is trouble. We doubt it. We think the dawn of the Warsh era looks like a benign return to an old-school Fed. Read Full Article »