Warsh’s first Fed meeting could be more about communication than rates

That philosophy could influence Wednesday’s meeting. Bank of America said there is a chance Warsh declines to submit his own projections to the Fed’s Summary of Economic Projections, or SEP, a move that would highlight his long-standing criticism of the central bank’s forecasting process.

“If you’re not very good at something, you should do less of it,” Warsh said at a State Street conference last year, according to the Journal. “These forecasts have been abysmal. My dots wouldn’t be perfect either, so I wouldn’t give them.”

The SEP’s “dot plot,” which shows where policymakers expect interest rates to move, has become one of the most closely watched pieces of Fed communication. Bank of America, in line with the market, expects this week’s projections to show rates remaining unchanged through 2026 before modest cuts in 2027 and 2028.

The investment bank also expects policymakers to acknowledge rising inflation risks while signaling a lower willingness to look through price shocks than in recent years.

Warsh’s first press conference as chair is likely to attract the most scrutiny. Bank of America expects him to strike a patient tone, arguing that recent inflation pressures linked to geopolitical events, such as the conflict involving Iran, may prove temporary, while avoiding any signal that rate cuts are imminent.