New York – The era of Kevin Warsh, the new chair of the U.S. Federal Reserve, began with a jolt on Wall Street, with investors bracing for sharp moves as the central bank pulls back from signaling possible future interest rate moves.
The Fed held interest rates steady as expected on Wednesday, but new projections and comments from Warsh, who was presiding over his first meeting as chair, blindsided traders and led markets to price in a possible hike within months.
Investors are now confronting a more opaque Fed under Warsh, one that is retreating from forward guidance and overhauling its messaging — a shift that could inject fresh volatility into markets.
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