Warsh won’t prejudge rest of 2026, names October and December as decision points

With no guidance from the chair, short-dated Treasuries and the dollar will take their lead from data before the 27–28 October meeting, which points to bigger reactions to releases. His comment that events have broadly matched expectations leans slightly hawkish, since the September projections pointed to another hike this year. Oil remains a key input: fuel-driven inflation tied to the Iran war is the main source of upside price pressure, so moves in crude will feed directly into hike pricing. A hawkish-leaning Fed has tended to weigh on gold rather than support it.---Earlier, Hammack no so reticent on forward guidance:Fed's Hammack questions whether Fed policy is tight enough as inflation risks build--- Warsh came to Bangkok and said, in effect, watch the data, not me, which is exactly what he has been promising to do.Summary:Warsh said he does not believe in saying what he might do at meetings for the rest of 2026He said the October and December meetings will be the crystallising moments for judging output, jobs and inflationSince the September meeting, the world has broadly conformed to Fed expectations, he saidHe called a structural investment surge the biggest upside in the global economy, crediting good policiesAI will hit demand before supply, will make the economy more productive over time, and has an uncertain near-term impact on jobs, he saidThe Fed will hold a field hearing on AI in the San Francisco Bay Area on 16 November Federal Reserve Chair Kevin Warsh declined to signal the central bank’s next move on Friday. He said he does not believe in saying what he might do at meetings for the rest of 2026, and pointed to the Fed’s October and December meetings as the moments when policymakers will take stock.Speaking at an IMF session in Bangkok, held during the IMF and World Bank annual meetings, Warsh said the world has broadly conformed to the Fed’s expectations since its September policy meeting. He said the Fed has made clear it will deliver price stability, but that he does not believe in prejudging meetings. Policymakers will make their judgements at the October and December meetings, which he described as the crystallising moments for assessing output, employment and inflation.The refusal to give guidance was no surprise. Warsh has repeatedly argued that the Fed should say less about its intentions so that markets form their own view of the economy, and he has said he opposes signalling decisions in advance. Friday’s comments put that approach [into practice](LINK TO QUIETER FED PIECE), leaving investors to rely on incoming data ahead of the 27 and 28 October meeting.His remark that events have broadly matched expectations is still worth noting. In September the Fed raised rates by a quarter point to 3.75% to 4.00%, its first hike since 2023, and most officials projected at least one further increase this year. If the outlook has unfolded as expected, that suggests he sees little reason so far to depart from that path, although he stopped short of saying so.Warsh devoted much of his remarks to investment and artificial intelligence. He described a structural investment surge, which he attributed to good policies, as the most important upside development in the global economy. On AI, he said the technology would make the economy more productive and create more wealth, but that the path would be bumpy, and that its near-term impact on employment is uncertain. He said AI is likely to boost demand before it delivers the supply-side gains that could ease inflation, and that it should also help central banks gain confidence in their data.That sequencing matters for policy. If AI-related investment lifts spending now while productivity gains arrive later, it adds to near-term inflation pressure. That is consistent with Warsh’s earlier argument that current rates are not restricting activity.Warsh also said the Fed’s policies spill over to the rest of the world, but that other countries’ policies spill back to the US too. He added that the Fed will hold a field hearing on AI in the San Francisco Bay Area on 16 November, as part of its task force work.The next markers are US data ahead of the 27 and 28 October meeting, and whether other Fed officials fill the gap left by the chair’s silence. This article was written by Eamonn Sheridan at investinglive.com.