The following summary represents direct quotes (with minor immaterial changes to make reading easier) from the press conference – Prepared remarks and Q&A session.
- New Chairmanship & New Initiatives
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. The Committee will be working in close collaboration to ask what changes might improve the conduct of monetary policy.
Communication
As evidence, (1) 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 provides the facts, as best the members judge it, (2) absent is “forward guidance,” which is agreed as not well-suited to the current policy conjuncture. (3) Summary of Economic Projections will continue to be made available, however, Chair Warsh has refrained from offering any projection of his own which is consistent with his long-held views on the SEP, at least as currently structured.
Establishing Five Task Force
Appointing task force in each of five areas that are central to the broad conduct of monetary policy:
- Fed communications
Improvements in the form and function of Fed communications including forward guidance, and propose some well-considered changes, including to the SEP. However, the Chair did not submit a “dot” for the latest SEP.
- Fed’s balance sheet policy.
Review the benefits and risks of the current ample reserves regime, and the composition of the Fed’s balance sheet. Assess alternative frameworks for the conduct and operation of monetary policy.
- Use and reliance on existing data sources.
Evaluate new information sources and consider methodological changes to improve data gathering, with the aim of giving policy makers more accurate, relevant, contemporaneous, and perhaps most important actionable information on the state of the U.S. economy. Most of the data that central bankers and other government officials in the U.S. consume come with (a) old-fashioned survey methods, (b) national accounts of what the U.S. economy looks like that looks very little like the U.S. economy in 2026, (c) survey methods that don’t have response rates that we need, and (d) asking questions that might’ve been quite applicable a generation ago that are less applicable now. What the Committee is really interested in is what is happening right now and is less interested in is echoes of history because hard decisions have to be made in real time.
- Productivity and jobs in an era of transformation
Survey the pace, the reach, and economic impact of new general-purpose technologies, including AI, and explore the implications for the Fed in pursuit of our employment and inflation mandates.
- Fed’s inflation frameworks
Examine the drivers of inflation, first principles, and weigh the full range of ideas for delivering price stability in a changing economy. The task force’s remit is (a) what are the drivers of inflation, (b) what’s the Fed’s responsibility for inflation, (c) in part how do is inflation measured which will overlap with the data task force. The Federal Reserve’s long-held objective is 2 percent is outside the scope of the task force.
- The Economy
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 are both strong. In the median projections, real GDP rises at 2.2 percent this year, 2.3 percent next year, and total PCE inflation runs at 3.6 percent this year, 2.3 percent next year.
- The Labor Market
Job gains have kept pace with the workforce, and the unemployment rate has changed little. The unemployment rate stands at about 4.3 percent.
- Inflation
Inflation has been running well ahead of the Fed’s long-stated inflation goal of 2 percent that’s been going on for more than 5 years; in part reflecting supply shocks that have driven price increases in certain sectors, including energy. Persistently high prices are a burden for the American people. But the recent past need not be prologue. Inflation is primarily determined by monetary policy. Inflation is a choice and the members of the FOMC are unambiguous and unanimous going to deliver price stability.
- Fed Funds Rates
The Committee decided to maintain the target range for the fed funds rate at 3-½ to 3-¾ percent, in support of the Fed’s dual mandate. The Committee also reaffirmed its policy of maintaining ample reserves in the banking system. Chair’s view is uneven regarding current policy being restrictive. For example, in the housing area it appears to be somewhat restrictive but not so if looking at the financial markets. The unevenness perhaps is a function of different transmission mechanisms of whether monetary policy is coming from interest rate tool or balance sheet tool.
https://www.federalreserve.gov/mediacenter/files/FOMCpresconf20260617.pdf