Fed reduces meetings on interest rates from 2027

O president of the US Federal Reserve (Fed), Kevin Warsh, today announced that the central bank will reduce the number of meetings on interest rates from 2027 and said that inflation is “too high.”.

According to the President of the Central Bank, the Fed will change its monetary policy agenda, so in 2027 it will reduce the number of annual meetings in which decisions on interest rates will be taken from eight to seven.

As of 2028, only six monetary policy meetings are expected.

Warsh said that this change in the schedule of meetings of the Federal Open Market Committee (FOMC) is due to the need for its members to have more time to discuss tax decisions.

“ We believe that eight meetings per year are the appropriate number for the FOMC. However, in 2027, one of the meetings will focus exclusively on the general monetary policy strategy, without a vote on the interest rates of federal funds or the issuance of a monetary policy statement,” he explained at a press conference.

“ In addition, I predict that in 2028 we will have two meetings devoted to the debate on the strategy and six for the definition of monetary policy,” added the President of the Fed, a body that has been holding eight meetings a year since 1981, according to the EFE.

Warsh pointed out that “in order to get monetary policy right, it is necessary to assess short-term developments at timely, regular and comprehensive information-based intervals” and that, in turn, it is necessary to have time to deliberate and share ideas.

“ It is also important that, as a group characterized by its intellectual diversity, we reserve time and space for strategic deliberations, to rethink fundamental issues, adopt a longer-term perspective and, as I say, focus on what comes before the comma”, he explained.

Warsh, who took over the presidency of the Fed last May, considered that redefining the calendar and agenda of meetings “goes beyond a mere administrative procedure”.

“ It is an institutional decision that influences the nature and quality of our deliberations and, ultimately, the assertiveness of our decisions”, he added.

On the day the US central bank decided to keep interest rates unchanged, the President of the Fed also stated that inflation is “too high”, pointing to price level as the main economic problem in the United States of America (USA).

Warsh also ensured that the proximity of the US mid-term elections did not weigh heavily on the decision to maintain interest rates.

During the two days of the Fed meeting, “I heard no mention of politics, elections, or what will happen next week. I have not heard anything about it and I do not believe it had any influence on the decision, either for me or for my colleagues in the room”, he said.

The US Federal Reserve (Fed) decided to keep interest rates in the range between 3.75% and 4%, as anticipated by analysts and after a two-day meeting, it was announced today in a statement.

The decision was not unanimous, with two members of the Federal Open Market Committee (FOMC) voting against, preferring an increase of 0.25 percentage points.