Warsh Says There Was Much Agreement on Hard Questions

Summary

Federal Reserve Chairman Kevin Warsh explains that rates are higher than 42 days ago and that markets have moved up nominal Treasury yields. He pushes back against the view that markets have not reacted to the Fed's hold decision, noting that monetary policy works through financial market prices. The vote was 9-3 to hold rates, but there was broad agreement on the difficult questions about economic shocks, tools, and price effects. Warsh describes the current stance as 'watchful thinking' rather than watchful waiting.

• Treasury yields have risen since the last Fed meeting, reflecting market judgments on the policy path
• Warsh says it is a mischaracterization that markets haven't reacted to the hold decision
• The policy rate vote was 9 to 3, with broad agreement on the hard questions about the economy
• Policymakers are in a period of 'watchful thinking' rather than waiting
• The Fed will continue to monitor market information to guide its upcoming decisions