Kevin Warsh told Wall Street he’d be sharing less—Goldman Sachs fears a void of Fed facts will only amplify misinformation and instability

Fed Chairman Kevin Warsh suggested that the central bank should reduce its communication of monetary policy expectations, citing concerns over the negative impact of forward guidance on markets. Wall Street welcomed the potential for less noise, with securities reacting positively to Warsh's statement, while Goldman Sachs chief U.S. economist Jan Hatzius expressed fears that a void of information would lead to greater misinformation and instability.

Hatzius argued that markets would have less reliable information on which to base decisions, leading to potential overreactions to data points and unnecessary volatility. Some observers, such as emeritus professor of finance Jeremy Siegel, pointed out that central bankers should still provide explanations for their decisions, even without explicit forward guidance.

Hatzius also warned that relying on the opinions of a few influential voices within the Federal Open Market Committee (FOMC) could be misleading if those views are not representative of the committee as a whole.