Federal Reserve Board Chair candidate Kevin Warsh arrives for his confirmation hearing before the Senate Banking, Housing and Urban Affairs Committee in the Dirksen Building on April 21, 2026.
Tom Williams | Cq-roll Call Inc. | Getty Images
As the Federal Reserve concludes its policy meeting on Wednesday, it may be missing one important point: a point.
The central bank’s Federal Open Market Committee will issue quarterly updates on where officials expect interest rates to go this year, in 2028, and beyond. Markets closely parse the grid, commonly known as the “dot plot,” for information about how Fed officials view the economy and its impact on monetary policy.
But most Fed watchers on Wall Street expect new Chairman Kevin Warsh to stay out, either because he just took over on May 22 and feels unprepared, or because he simply doesn’t like the dot plot and its impact on “forward guidance.”
Refusing to submit dots would go against the Fed’s nearly 14 years of post-crisis practice and risk alienating other FOMC officials who support ways to help communicate with the public. But it could also be an effective first step for central bank leaders who are vowing to fundamentally change the way their central banks operate.
“I think it’s pretty likely that he doesn’t want to provide an interest rate outlook,” said Bill English, a former Fed monetary affairs director and current professor at Yale University. “Some people on the committee may not particularly like dot plots, but they may also be happy to do them.”
“FRB people”
Mr. Warsh opposes dot plots and other forward guidance techniques because he believes they limit the Fed’s decision-making ability.
The dot plot is part of a larger data set called Summary Economic Forecasts, which also includes forecasts for unemployment, inflation, and gross domestic product. The SEP is updated quarterly and includes the median outlook for each category, so it is not an official outlook and is only the midpoint of the range of FOMC meeting participants.
Aditya Bhave, an economist at Bank of America, expects Mr. Warsh will not provide a rating, while Goldman Sachs economist David Mericle said in a note: “Given Mr. Warsh’s past criticism of forward guidance, we assume he will not provide a rating, but we are not certain.”
During his confirmation hearing in April, Warsh cited SEPs as part of a broader problem of overcommunication at the Fed. Specifically, he said the Fed’s erroneous “temporary” assessment of inflation in 2021-22 led to a series of aggressive interest rate hikes to counter the biggest price rise in 40 years.
“The Fed is telling the whole world what their score is going to be, what their projections are going to be,” he said at the time. “Well, the Fed is human. Then they hold on to that projection for longer than necessary. If the Fed waited until it was in its meeting before making a decision, I think its incremental deliberations could prevent the central bank’s mistakes from getting even worse. I think these are major changes that are needed.”
The market is paying attention
Still, the market depends on Dotplot and the rest of SEP, and if Warsh has his way, he may have to learn to live without Dotplot.
“For me, it didn’t mean much that[SEPs]were sometimes moving the market because their accuracy was middling at best,” said Liz Ann Saunders, chief investment strategist at Charles Schwab. “But this is a way for the Fed to express a view, and the market tends to move based on that view.”
Economist Claudia Sahm warned that not joining Warsh and others could send the wrong message to markets. Specifically, he said investors could interpret the news as Mr. Warsh trying to “cover up the committee’s hawkishization” to fight inflation from rising interest rates.
“Neutralizing the SEP this week may alleviate some of Mr. Warsh’s concerns, but it will almost certainly create new ones,” said Sahm, chief economist at New Century Advisors. “A Fed that appears to be hiding its arguments can appear complacent about inflation, and that’s exactly the kind of credibility it can’t afford to lose.”
The conference is expected to be an interesting test of Warsh’s new communications strategy.
In addition to his views on the dotplot and SEPs, the market will also be watching for changes to his post-meeting statements and his views on whether to continue holding press conferences after each meeting.
