Federal Reserve Chair Kevin Warsh announced Wednesday that the central bank will eliminate one of its eight annual rate-setting meetings starting in 2027, replacing it with a session focused on broader monetary policy strategy. The change marks a significant shift in the Fed’s long-standing policy calendar, which has included eight scheduled meetings per year since 1981.
The Federal Open Market Committee (FOMC) will hold its first strategy-focused meeting in fall 2027, with a second such meeting planned for 2028. These sessions will not include interest rate decisions or post-meeting statements, according to Warsh. The remaining seven meetings in 2027 will continue to address rate policy as usual.
Warsh cited the need for deeper strategic deliberation as the rationale for the change. In a statement, he emphasized that while the Fed must assess near-term economic developments regularly, it also requires time for "strategic deliberations" and "thinking anew about big questions" over longer time horizons. He added that the adjustment would allow the committee to accumulate more economic data between rate decisions.
The Fed’s latest policy announcement, released Wednesday, maintained interest rates at their current levels. However, the decision drew dissent from two governors, who advocated for a rate hike. Warsh also confirmed that he would not contribute to the Fed’s quarterly "dot plot", which forecasts policymakers’ expectations for short-term interest rates, further signaling a departure from traditional forward guidance.
Warsh has ended forward guidance
The Fed under Warsh has already moved away from its long-standing practice of providing forward guidance—predictions about future rate moves—to financial markets and the public. Warsh has stated he does not believe in forward guidance, calling it unnecessary for policy transparency. This shift has increased uncertainty for investors, who previously relied on such signals to anticipate the Fed’s next moves.
Market reactions and long-term implications
The reduction in rate-setting meetings could heighten market volatility, as each remaining decision carries greater weight. Analysts note that the change makes the Fed an outlier among major central banks, including the Bank of England and the Bank of Japan, which maintain more frequent rate-setting schedules. The move has been debated for years, with critics arguing it could reduce the Fed’s agility in responding to sudden economic shifts.
Warsh, appointed by President Donald Trump in May, has been reshaping the Fed’s operations since taking office. His tenure has already introduced fewer public communications and a greater emphasis on long-term strategic thinking over immediate policy adjustments.
Background on the Fed’s meeting structure
The FOMC typically meets for two days eight times per year, issuing statements after each meeting to outline economic conditions and rate decisions. The new strategy meetings will not produce such statements, marking a departure from the Fed’s long-standing transparency practices.
The Fed’s next policy meeting is scheduled for December, where it will continue to assess economic conditions and determine whether further rate adjustments are warranted.