Federal Reserve Chairman Kevin Warsh: No Predictions on Future Decisions
Federal Reserve Chairman Kevin Warsh stated at a press conference following the interest rate hike that he will not predict any future decisions, leaving the next actions to the meetings rather than outlining a path today.
The committee recently voted 12-0 to raise the federal funds rate by 25 basis points to 3.75%–4.00%, stating that this move supports a quicker return to the 2% target. Warsh also indicated that inflation risks are tilted to the upside and mentioned that he is not a data-dependent person.
The dot plot still shows that 16 members expect at least one more hike this year. The chairman's refusal to predict comes after a unanimous rate hike and hawkish risk statements, allowing the dot plot to remain flexible and avoiding turning the press conference into a second vote.
The White House's pressure for rate cuts remains. This standard phrasing appears alongside "price stability" and "upside risks," indicating that administrative pressure and single-month data cannot preemptively dictate outcomes outside the meeting.
In market mechanics, this is a communication hedge: hawkish statements raise pricing for a second rate hike, while the refusal to predict prevents pricing from being fully locked in. The short end oscillates between 25 basis points and another hike, while the long end digests supply shocks. Cash and floating rate positions still dominate, and the rate cut trade lacks the chairman's endorsement; funds are caught in the volatility between meetings rather than betting on a single path.
Source: Public Information
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Volcker, Greenspan, and Powell have all used the phrase "not predicting the next move" to prevent the market from treating press conferences as policy committee meetings. Warsh's immediate use of this phrase after his third meeting and first rate hike is to avoid the interpretation that "upside risks" imply a December decision is set. He also rejects reliance on data points, effectively keeping both options open: not allowing CPI decimals to dictate decisions, nor letting his adjectives lock in the dot plot.
The capital path leaves uncertainty in short-term options. Trading desks cannot create a high-confidence direction for a second rate hike, only trading the volatility between meetings; bank books continue to absorb higher overnight rates, and long-term issuances are still delayed. If the White House interprets this phrase as a softening, it will misalign with the dot plot.
This is analogous to Powell's repeated emphasis on data dependence in 2023 and the market interpreting "gradual" as a pause in mid-2018: the same refusal to predict, paired with hawkish statements, acts as a brake, while paired with dovish statements acts as an accelerator. The current pairing is a unanimous rate hike with upside risks, thus this phrase acts as a brake on expectations, not on the rate hike itself.
Structural judgments belong to the transfer of pricing power. The mechanism is that the chairman uses "not predicting" to reclaim interpretative authority for the next meeting, while "upside risks" defines the original hypothesis direction; the market can trade biases, but cannot trade dates. Dates still belong to the committee, not the press conference.
ABAB News · Law of Cognition
Not predicting the next move is to prevent this move from completing the next one.
Hawkish statements paired with a refusal to predict sell volatility, not direction.
The path is written in the dot plot, the date is written in the next vote.