Federal Open Market Committee, Federal Reserve
FOMC Press Conference, June 17, 2026
About Fomc Tweets
In June 2026, the FOMC, under new leadership, maintained the federal funds rate at 3.5% to 3.75% and reaffirmed its policy of maintaining ample reserves. The committee's statement omitted forward guidance, which the chair said was "not well suited to the current policy conjuncture." The chair announced the creation of five task forces to review Fed communications, balance sheet policy, data gathering, productivity and jobs (including the impact of AI), and inflation frameworks. The chair stated that the committee was "unambiguous and unanimous" in its commitment to deliver price stability, and said he did not believe there was a "cruel choice" between tolerating higher inflation and achieving strong employment. The chair also said he had refrained from offering his own economic projections, consistent with his long-held views on the Summary of Economic Projections. In April 2026, the FOMC also left the policy rate unchanged, citing solid economic expansion and elevated inflation partly due to global energy prices and tariffs. The chair described the current policy rate as "well in the range" of a reasonable neutral rate and noted that the number of committee members who could support a more neutral stance had increased. He stated that the committee was "well positioned" to adjust policy in either direction based on incoming data. Separately, in May 2026, Vice Chair for Supervision Bowman discussed the economic well-being of U.S. households, noting that 73% of adults reported doing okay or living comfortably financially, while prices remained the most common financial concern. She also addressed regulatory burdens on community banks, including issues with the community bank leverage ratio and Regulation O compliance.
Transcript (58 segments)
✨ AI-enhanced transcript with speaker attribution
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Kevin Warsh0:07
Good day. It's an honor, a true honor to be back at the Federal Reserve and to take up this duty at a time of such consequence. I've been especially heartened by the warm welcome of old friends and new colleagues both. And I've listened closely to my fellow FOMC members for a lot of new ideas, new thinking, and genuine interest in moving the Fed forward. This week's FOMC meeting exemplified the very best of the Fed's traditions: rigorous debate, open-mindedness, commitment to mission, responsibility, and accountability for performance. In this business, they all add up to one thing: getting monetary policy right, or as near to it as we can do. That is our northstar.
My colleagues and I are here to serve our legislative remit, which you've heard us say before: price stability and maximum employment. And these objectives guided our business in the meeting just concluded. As you saw a few moments ago, the committee decided to maintain the target range for the Fed funds rate at 3.5 to 3.75%. In support of the Fed's dual mandate, the committee also reaffirmed its policy of maintaining ample reserves in the banking system.
Economic activity is expanding at a solid pace despite elevated uncertainty that owes in part to the conflict in the Middle East. Productivity growth and capital investment both strong. Job gains have kept pace with the workforce and the unemployment rate has changed little.
We recognize that inflation has been running well ahead of the Fed's long-stated inflation goal of 2%. That's been going on for more than 5 years. Persistently high prices are a burden for the American people. But the recent past need not be prologue. I am pleased to report that members of the FOMC are unambiguous and unanimous. This committee will deliver price stability.
At any institution, a change in leadership is a natural and timely opportunity to reaffirm its mission, to review current practices, and to consider whether those practices best meet our objectives. My Fed colleagues and I will be working in close collaboration to ask what changes might improve the conduct of monetary policy. On that score, you might have already noticed a difference in today's policy statement. It's a bit shorter, a bit simpler, and it dispenses with some older language. That statement just gives you the facts as best we can judge it. It also abandons so-called forward guidance, which we agreed was not well suited to the current policy conjuncture.
This afternoon, you also received the usual summary of economic projections. It's been the practice of this committee for participants to submit these projections, and I have encouraged my colleagues to continue to do so. I, however, have refrained from offering any projections of my own, consistent with my long-held views on the SEP, at least as currently structured.
In the median projections, real GDP rises at 2.2% this year, 2.3% next year, and total PCE inflation runs at 3.6% this year, 2.3% next year. The unemployment rate stands at about 4.3%. The median participant judges the appropriate federal funds rate to be at 3.8% at the end of this year and 3.6% at the end of next.
Let me turn now to a few words on a key initiative that we're announcing today. I'm appointing a task force in each of five areas that are central to the broad conduct of monetary policy. First, Fed communications. Second, the Fed's balance sheet. Third, our use and reliance on existing data sources. Fourth, productivity and jobs in an era of transformation. And last, the Fed's inflation frameworks. These subjects are timely, consequential, and in my view, worthy of a fresh look. My colleagues and I discussed them with energy and purpose over the last couple of days. For each of these independent task forces, I'm enlisting some of the very best minds both inside and outside the economics profession. They will be supported by subject matter specialists from our superb Fed staff, and they'll have a straightforward charge: start with first principles, ask hard questions, examine current practice, consider alternatives, and ultimately propose next steps for policymaker consideration.
Since last summer, my colleagues have discussed possible improvements in the form and function of Fed communications. This new task force will build on that effort and, I expect, propose some well-considered changes, including to the SEP I mentioned a few moments ago. The second task force, the one on balance sheet policy, will review the benefits and risks of the current ample reserves regime and the composition of the Fed's balance sheet. They will assess alternative frameworks for the conduct and operation of monetary policy. The third task force, the one on data, will evaluate new information sources and consider methodological changes to improve data gathering with the aim of giving policymakers more accurate, relevant, contemporaneous, and perhaps most important, actionable information on the state of our economy.
Fourth, the task force on productivity and jobs. It'll survey the pace, the reach, and the economic impact of new general purpose technologies, including AI, and explore the implications for the Fed in pursuit of our employment and inflation mandates. The last task force, the one on inflation frameworks, will examine the drivers of inflation from first principles and weigh the full range of ideas for delivering price stability in a changing economy. You'll hear quite a bit more about these task forces and this overall initiative in the coming weeks. Enough for now to make a simple statement: each task force will serve an objective shared by everyone in the system, shared by everyone around that table that I sat with over the last couple of days. A Federal Reserve that is clear-eyed about its mission, fit for purpose, and focused on the future. And with that, I appreciate your attention. I'm happy to take your questions.
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Reporter7:56
Howard Schneider. Hi, Chairman. Howard with Reuters. Good to see you again and welcome back. This is a lot to be putting in motion so fast. What is the timeline you have in mind for each of these?
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Kevin Warsh8:11
I think it'll depend on the task force. It also depends on the urgency in which we need clear answers. I'm still in the business of recruiting and finalizing them. My expectation is the task forces will begin work in the next couple of weeks, and we'll start to get some more information from them, some more framing of how they see things starting in the fall, and hopefully most, if not all, of them concluding by year end.
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Reporter8:40
And just specifically on the inflation framework review, you talk about first principles. Does this include a review of the 2% target itself? You've mentioned that things to the right of the decimal point don't matter. Should this be starting from a premise that 2% as a point estimate is too strict?
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Kevin Warsh9:00
Let me break that into two pieces. First, on the inflation framework review, their remit is: what are the drivers of inflation? What's the Fed's responsibility for inflation? In part, how do we measure inflation? That'll overlap with my data group. On the 2% inflation objective, that is the Federal Reserve's long-held objective of 2%. You've heard me say before I tend to focus on the left of the decimal point. Well, the two is the left of the decimal point. For now, zero is to the right. I see no reason until we have reestablished our commitment and ability to deliver on the 2% inflation objective to revisit that. So, that'll be outside the scope of what we're taking on.
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Reporter9:46
Colby Smith with the New York Times. You've in the past said that inflation is a choice, and in the policy statement it includes this pledge to deliver price stability as you've reiterated today. But looking at the SEP, the bulk of your colleagues expect core PCE to run around 3.3% by year end and for the 2% inflation target not to be reached until 2028. So, I'm curious how patient you think the Fed can afford to be at this juncture in terms of waiting for one-time inflation waves to wash through and for underlying inflation to step down after so many years of inflation running above target, and under what circumstances you would support the Fed taking action and raising rates.
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Kevin Warsh10:31
Sure. So, quite a bit there. Let me try to break that into pieces. First, we have the capability and commitment to deliver on our price stability objective of 2%. That's exactly what we're going to do. In the Fed's review of its strategy over the last number of years in January, the Fed, including the strategy that we're still bound by, the Fed statement says that inflation is primarily determined by monetary policy. You bet it is. I've said for years, inflation is a choice. You bet it is. And today I'm announcing that this committee unambiguously and unanimously has decided we are going to deliver on that. The rest of your questions sounded like encouragement for me to give forward guidance. We've dropped forward guidance. Some on the committee, I think, dropped it from our discussion the last couple of days because they said at this moment in time it doesn't feel as though providing forward guidance is right. Others have different views and think as a general proposition, forward guidance isn't the business we should be in, but that'll be taken up by the task force on communications and my policymaker colleagues. We're going to listen hard to what the experts say and make our own decision. But I can't give any forward guidance about what we're going to do next. The good news is we'll be meeting in six weeks.
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Reporter11:56
Just following up on the current policy settings then, I am curious how restrictive you think things are at the current moment given the flow of data that we've seen and the forecasts coming down the pipeline.
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Kevin Warsh12:09
Yeah, I've heard characterizations both inside and outside the Fed about that. I'll give you my own: it's uneven. If I look at the housing markets as one example, Fed policy isn't the single determinant of the state of the housing market, but broadly I would say Fed policy appears to be somewhat restrictive. I would have a hard time saying those words if I were to see what's happening in financial markets. So I'd say it's uneven. That's perhaps a function of different transmission mechanisms of monetary policy, whether monetary policy is coming from our interest rate tool or a balance sheet tool. But the good news is we have a task force on that too. And the balance sheet task force will be looking more at that subject.
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Reporter12:55
Mike McKe. You said you don't like forward guidance. You dropped it from the statement this time, but with the dot plot, nine members suggested that they want a rate increase by the end of the year and the markets have taken that as forward guidance. So what does this mean in terms of how you guide the markets and in terms of what the dot plot's future is?
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Kevin Warsh13:22
I'm going to have to give you the same answer I gave to Miss Smith. We've got a task force for that. I'll give you a little bit more. I reviewed the dot plots and when I saw the submissions I noted that all the submissions were coming in with pencils - you know, those kind with the big erasers. That's to say that my colleagues around the table when they submitted their dots understand the world is changing quite quickly and they didn't feel bound by them six weeks from now or six days from now if their circumstances change. I'll note a couple other things. What I heard around the table was as they submitted their modal forecasts - their modal forecasts, to be clear, were more likely than not, more likely than their other scenarios. So, I didn't hear a ton of conviction. What I heard was the kind of humility that I think we should have. I did not submit a dot. For me, it's not helpful in the conduct of policy. I suspect by year end, as I mentioned in my opening statements, there'll be a review about communications broadly - press conferences, dots, meetings, and the like, transcripts, minutes. This will be part of that. I don't want to prejudge the outcomes there, but I'm pretty open-minded about what they could be. And I was just incredibly impressed over the last couple of days with my colleagues. Over the last three weeks I've been here, they've been very open about changes. Change isn't easy. Change is filled with risk. But our number one goal is to get monetary policy right. The way to get monetary policy right is to deliver on the remit that Congress gave us to deliver on price stability. And there was no disagreement on any of those points.
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Reporter15:18
At the risk of getting the same answer about task forces on communications, what is your feeling about these news conferences? Are you going to continue one after every meeting? Do you find them useful? What is the future for the way Kevin Warsh will communicate?
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Kevin Warsh15:38
Well, this one's probably got another 15 or 20 minutes in it, so I don't want to prejudge the outcome. Press conferences can be a very useful way to communicate with households, businesses, and more broadly through using the likes of you. I had a great old mentor named George Schultz, and his mantra was press conferences are useful, but when you have one, you want to make sure you have something important to say. Today, I think we had something important to say about our commitment to deliver on price stability, our commitment to rethink practices with an eye on moving the Fed forward, and to give you and the American people a sense that these aren't idle thoughts – these are concrete thoughts. We're going to seek out the best minds, both the best thinking inside of the Federal Reserve and the best people I know in business, economics, the academy, and technology and the rest to share their views. That's what we're going to be doing here – the pursuit of truth. I think we're going to come up with some new and interesting things. We made some changes today. I expect more changes to come, and some of those might well be worthy of a press conference.
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Reporter16:47
Chris Rugber at Associated Press. Could you give us a sense of how you see inflation more in the long term? Is this mainly driven by energy prices in the Iran war at this point, or do you have any concerns about underlying inflation pressures in the economy?
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Kevin Warsh17:11
I can't do much better than the committee just did, so let me restate it. Inflation remains elevated relative to the committee's 2% goal, in part reflecting supply shocks that have driven price increases in certain sectors, including energy. That paragraph goes on to say, but to be clear, the Fed will deliver price stability. My own judgment is the committee spent quite a bit of time – not just in two days but over iterations of a couple of weeks – and that's what we're prepared to say about inflation. But the commitment to deliver is strong, unanimous, and unambiguous, and that is an important message we've missed for five years, and we're going to fix that.
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Reporter17:57
And then just on the data task force, generally speaking, people feel the Fed looks at everything already. Is there data that you feel is not given enough weight? What is that task force looking at?
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Kevin Warsh18:27
You're answering my question, so let me say I don't want to prejudge the outcome. I also don't want to say too much about what they're going to do because I still have a phone call or two to make before I've nailed down the people. I'm interested in what the outside experts view is on the subject. I'll say this generally: most of the data that central bankers and other US government officials consume come from old-fashioned survey methods – a national accounts picture of the US economy that looks very little like the US economy in 2026, survey methods that don't have the response rates we need, asking questions that might have been applicable a generation ago but are less applicable now. So even inside official statistics, I would be open-minded if the task force and our own best thinking have recommendations on how those official statistics can be brought up to the standard of our time. I'd also say almost every private company CEO running their business is doing so with real-time information that isn't subject to much revision, telling them what just happened at that very moment. As you know, there are normal long and variable lags in the conduct of monetary policy. What we're really interested in is what's happening right now. What we're less interested in is echoes of history. When we wait for the first Friday after the month for the payroll index, that might be an echo of history useful on its third revision. We need to take those error bounds down because we have to make hard decisions in real time. I'm really open-minded that there are many new data sources we can learn from, both from the private sector and reforms in the official sector, and new analytic techniques far more refined than asking a simple question about whether something was core or noncore.
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Reporter20:39
Edward Lawrence with Fox Business. If you don't give ongoing forward guidance, won't the markets have more volatility and shouldn't Americans have more insight into what you're thinking going forward?
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Kevin Warsh20:57
I think financial markets perform best when they react to incoming data. I think financial markets work less efficiently when they ask how the Federal Reserve will react to that incoming information. The more that markets pay attention to what's happening in the real economy, deciding what's good data and what's less good data, the more they can price what they believe is the most likely outcome and the tail risks. Financial market prices are probably the most important source of information to guide central bankers. But when all financial markets are doing is reflecting back what we've said, then we're taking the most important source of information and blinding ourselves to it. I'd like us to create a system where those blinders come off, where markets follow data that they efficiently think is reliable. They'll watch data, we'll watch data, they'll bring better information through market prices to us. We can make more informed decisions, with the ultimate goal of delivering on the price stability objective that Congress told us to do.
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Reporter22:12
If I could take you inside the meeting a little bit, this is your first meeting. The board members seem fairly hawkish in general. Was there any discussion of a rate cut going forward today?
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Kevin Warsh22:26
There was one proposal on the table. There was no discussion of any other proposals. The discussion on that proposal was quite limited. The group was unanimous and unambiguous on it. It has been the practice of this central bank and others to have a range of alternatives. Today we had one; I thought furthered discussion, deepened it, and made clear what we needed to do and how we needed to deliver. I wouldn't prejudge what happens in the future, but there was only one big subject for us. We took it on, had a good family fight for a couple of days, and ended up in a better place.
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Reporter23:10
Claire Jones, Financial Times. Coming to this blind, reading this nice short statement, one might wonder why you didn't raise rates today considering what you're saying about the risks to US inflation and your mandate. Why not, and what would you need to see to get to that place? And secondly, on your task forces, are there any best practices at other central banks that you'd consider looking at?
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Kevin Warsh23:51
I'm glad they're in the practice of giving you two questions because my answer to your first question was going to be very curt: I've got nothing more to say than the statement itself. And to the point of the question I got before, market reactions to what we say unfiltered is more helpful than having delivered a statement and then improvising further upon it. On best practices of task forces: find the best minds, ensure that the task forces have a range of people both by backgrounds and predispositions so they too can have a bit of a family fight. Make sure when you establish a task force that the group that will be the recipient of the information feels they have some equity in it too. That's why we're looking for – we haven't done the final roll call – some of the most significant talent we have in the building and across the reserve banks on each of these, and in some sense seconding them to this group for a period of some months, so that the leaders of the task force know what the most analytical central bank in the world thinks about it. They can reflect on it. A final best practice: we're not outsourcing decisions to anybody. Administrations past and present reserve banks have chosen a group of 19 people around the table. These will be our decisions. We can agree with some recommendations, disagree with others, have a good family fight, but what comes from them will make the discussion we have internally better, stronger, more of a dialectic so that we can finally deliver on that price stability objective.
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Reporter25:40
Just a quick follow up on your markets point. If you look at two-year yields, they're suggesting that markets think more tightening is needed. Would that be your read on what the 2-year yield is saying as well?
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Kevin Warsh25:52
We were in such a good place. This is why we don't do third questions, I presume. I'm not going to offer any commentary on market reaction over the last 30 or 60 minutes. What we've given markets is a new chapter for the central bank, some fresh thinking. What we've given markets, households, and businesses is a commitment to ask ourselves hard questions so that we can deliver on the promises we've made before. This is a lot of change for financial markets to digest. I wouldn't be particularly intrigued by how they react in the first several minutes or even the first several days. What is most important is that financial markets, and at least as important, households and businesses know that this central bank will deliver on price stability.
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Reporter26:45
Brian Chung with NBC News. When you say we've dropped forward guidance, for the lay person that might sound like the Fed is going to say less or offer less insight into where borrowing costs might go. For the person at the grocery store where price tags are rising faster than their wages, how would you explain this new chapter of the Fed?
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Kevin Warsh27:14
If I told somebody in the milk aisle that I had a task force for that, I think that would be doing a very poor job. So I appreciate it. If I saw somebody in the grocery store, what I would say to them is that we cannot have a very significant effect on particular prices. The price of oil in the markets today, or even the price of a dozen eggs, does not have first-order consequences for what we're doing. But we do have a really important job there: to make sure that those changes in oil, beef, eggs, or milk don't broaden in the economy, don't have second and third order effects. That's our job, that's our commitment, that's our capability, and we're going to deliver on it.
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Reporter27:57
And is the Fed's relationship with the Treasury also under review? There were the normal breakfast meetings with the Treasury Secretary. Is that something you intend to continue? And have you had conversations with the president since you were sworn in?
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Kevin Warsh28:11
On the president, I don't have anything for you. With respect to the Treasury Secretary, he has been posting pictures of our breakfast, so I don't think I can deny that. The long tradition at the central bank is that the Fed chairman and the Treasury Secretary meet weekly. I think we've pulled off three of those so far. I believe he's overseas this week, so this will be the exception. I think they're very useful discussions. The central bank's objectives and our roles and responsibilities are quite delineated from the fiscal authorities, and in my view, monetary policy is independent in the conduct of what we do. But that doesn't mean we're not interested in what's happening with the fiscal authorities. The way I think about it is this central bank needs to have a wide lens but a narrow remit. We need to be quite interested in what's happening in the world. I won't be breaking any news here to suggest I'm quite interested in what's happening in the Middle East – that does have some effect on our day job. It doesn't mean it's our responsibility, but I think we're going to keep a wide lens, and my meetings with Secretary Bessent to this point have helped widen that aperture, so we're aware of things that could affect our day job even if it isn't our direct responsibility.
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Reporter29:29
Steve Liesman, CNBC. You had said before you became chairman that you thought productivity was a reason why the Federal Reserve could lower interest rates. Do you still believe that to be the case?
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Kevin Warsh29:50
The committee had a discussion of productivity today. AI came up. The way I thought about it before and socialized with the group is that artificial intelligence, the latest generation of general purpose technology, is perhaps as important a change in the economy, business, and households as we've had in my adult lifetime. It is filled with huge opportunity and risks. I take both seriously. You may have heard me say before that AI is shorthand perhaps for American ingenuity. That doesn't mean it's going to be easy, certainly not that it won't be disruptive. But over the long term, my conviction – and I heard support for this around the committee today – is that the United States is a winner as we go down this path. The US is ultimately going to be better off. To bring that back to the conduct of policy – timing, scale, speed, implications for output and employment – that's one of the things we have a task force to do.
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Reporter31:04
If you don't mind a follow-up from the other side: when you look at the strong job growth, elevated inflation, GDP doing well, and the stock market soaring, do you look around and see the funds rate as restrictive?
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Kevin Warsh31:20
That's your second question. I'm going to give the same answer I gave before. As I think about the conduct of policy, what matters is the effect of policy – not what we say, but what happens. The best way I can describe it is uneven. I do see some restrictiveness in things like housing. It's hard to use those same words anywhere else. Let me make one other point. You talked about one of our dual mandates, the employment side. I don't believe that we have a cruel choice. I don't share the view expressed a few generations ago that a Federal Reserve chairman shows up at a podium and says you have to choose whether you're willing to tolerate higher inflation to put more people at work. I don't believe that. What I believe is if we do our job, we can make strong growth, low prices, and strong employment mutually compatible. So what you heard from the committee today is we've got some work to do on the price stability front.
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Reporter32:30
Nick Timiraos with the Wall Street Journal. Chairman Warsh, you've said repeatedly credibility is earned by delivering. If credibility requires delivering, the move would be to tighten or at least threaten to. You didn't do that today. Why not?
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Kevin Warsh32:50
That judgment you expressed was not expressed by any of the 19 people around the table. We'll be meeting in six weeks. We'll take up the issue again.
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Reporter32:59
And if I could ask about AI, the buildout is generating enormous demand right now – capex, data centers, power. The productivity payoff may be further out. So in your judgment today, is AI adding more to demand or to supply?
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Kevin Warsh33:13
It's a good question. At the central bank and in the economics profession, what we spend most of our time doing is counting demand – it's easier, we can see it, count it, check it, revise it. What we do is infer supply. You'll notice in the second paragraph of what one of your colleagues described as a very short statement, we have a sentence on the demand side and a sentence about the same length on the supply side. They're both important. Just because we can count one better than the other doesn't mean we favor one more than the other. With respect to AI and the growth of data centers and infrastructure around it, we're counting the demand side and it is no doubt showing up in GDP figures. We can be less certain when we infer the timing and extent of growth in the supply side. It may well be an intuition that the supply side will expand, but it'll take longer. I describe it this way: there's a race between supply and demand. Milton Friedman says the only thing we know about economics is that there's a supply line and a demand line, they ultimately cross, and we ask what are the implications for policy. The good news for you is we have a task force for that.
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Reporter34:34
Andrew. Thanks, Mr. Chairman. It sounded like on the task force on data, you were looking at completely overhauling the system of national accounts the way the government minds the economy. Is that your ambition?
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Kevin Warsh34:52
In a word, no. In a few words, much of this data gathering happens in other government agencies to which we owe a tremendous amount of respect and deference. But if in the course of this we come up with recommendations which Fed staff have already begun to develop about things they could be doing to help inform us as policymakers, we're not going to hesitate. Again, I don't want to delineate the four corners of the research of the task force on data, but I do think there will be a review of official statistics and at least as important, a view of bringing the best practices from the private sector and new analytical tools made possible by AI so we can forge these into a fabric that gives us better real-time information. So as I mentioned before, when we're making decisions, we're making decisions based on real contemporaneous data, not data that we call contemporaneous but is really an echo of history.
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Reporter35:56
Okay, thanks. The other question I wanted to ask is related to the building renovations. Are you considering any changes to the projects in light of the fact that they became a political football in the last year?
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Kevin Warsh36:10
I heard something about that. I don't think I'm breaking any news, but my view when you show up at a new institution is you should go meet with the inspector general as a matter of good practice. It's a practice I hope to continue. I've had one meeting with the inspector general, and he told me what I believe the world knows – that he'll be coming out with a report on the building and the building projects at some point later this summer. I'll be interested in reading the report. From my perspective, with a forward-looking glance, is there anything that we can be doing or should be doing from this moment until the completion of the project to be good stewards of taxpayer money and to make sure we deliver on the promises we made? So more work to do. You might not be surprised that in the first few weeks I've been somewhat preoccupied on other matters, but I promised to get to the full breadth of the Fed's tasks in the weeks ahead.
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Reporter37:13
Victoria Guida with Politico. I know you did not submit a forecast, but you are the person authorized to speak on behalf of the FOMC. In the SEP, the increase in expectations for inflation – is that all because of the Iran war? What was the discussion around expectations for inflation being higher and growth possibly slower?
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Kevin Warsh37:46
My read of what I heard in the room, reflected I must admit in the SEP, is that half of my colleagues thought the policy rate given all those developments should be at this level or lower between now and year end, and the other half thought higher. That 19th voter was me, and I didn't submit one. There's a range of views on the questions of first and second round effects, no resolution or conviction, but we'll be meeting again in six weeks. I think we're going to know more then, and my colleagues are very attentive to incoming developments between now and then.
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Reporter38:29
And just a quick follow up on the SEP – you said you're still encouraging your fellow committee members to submit forecasts even if you're not doing it. What do you think is the benefit of them doing it even if you don't?
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Kevin Warsh38:42
That's the commitment the FOMC made, and it's a commitment I hope we live up to. The commitment we made was to deliver price stability. I expect us to live up to it by the end of this year. As I mentioned, I wouldn't be surprised if there was a new communications framework and some changes to the SEP. That's a committee discussion, a robust discussion; we'll have it, and I believe we're going to come to a better mix of communications to deliver on what we've promised. But I wouldn't want to prejudge what those are. Between now and then, I would continue to expect colleagues to submit their SEPs. Some of them believe the practice as currently structured is okay, but I heard a lot of interest in real reform generally about all these topics. You didn't ask, but I'll answer: it was a pretty gracious couple of days and a warm few weeks. The institution wants to figure out how to do better. The institution is going back to first principles, and I'm encouraged that what we've done in the statement, what we're thinking about doing with respect to the SEP – that instinct towards a new chapter is a real one. By the end of the year, I hope we can put some points on the board both in form and substance of delivering.
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Reporter40:10
Thank you, Mr. Chairman. Bloomberg News. Could you guide us through some of the principles that guide your own reaction function and tell us a little bit about the conditions under which you think the Fed should respond?
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Kevin Warsh40:27
It's going to be a very unsatisfactory answer to the final question. The Federal Reserve has a lot of responsibilities not just in monetary policy but in supervision, regulation, consumer affairs, and payments. My own view is our credibility comes from delivering on what we say we're going to do across everything we do. I've devoted more time in my first three weeks to monetary policy than all those things. But the more we deliver on our promises as good supervisors and regulators, the more credibility we have in monetary policy. When we deliver on our price stability objectives, which we will, the American people will feel that the hardships they've been living through because of inflation the last five years are in the rearview mirror. That credibility will have dividends across what we do. And the institution will come to press conferences like this always with an impetus to reform, always with an impetus to do better. But we're going to put some points on the board.
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Reporter41:36
There's been strong labor data in recent months. How would you sum up the labor market right now? Do you see it as stable or as a potential source of inflation?
K
Kevin Warsh41:45
If I were to capture how the committee thought about it, they thought the labor markets were stable. Some thought it was trending better than that. Trends matter more than data points – what's happening over three or six months matters more than any one data release. I'd say the jobs data has been moving in a good direction. If I heard one other thing on that subject over the last couple of days, it was that strong productivity-led growth is not something we fear but something we embrace. Thank you all very much.