Kevin Warsh wants fewer press conferences. Why that's bad for the economy and your money.

By Craig Torres The Fed chair is testifying before Congress this week. Lawmakers should ask him about transparency. Fed Chair Kevin Warsh has said press conferences are useful when you have something to say. Investors are betting there is about a 1 in 4 chance the Federal Reserve will raise interest rates at its next policy meeting at the end of July. What they can't put odds on is whether Fed Chair Kevin Warsh will hold a press conference to explain why they raised or not. When asked about future press conferences at his first meeting with reporters in June, Warsh said they are useful when you have something to say. "I think we're going to come up with some new and interesting things," he said. "Some of those might well be worthy of a press conference." This phrasing appears to reserve press conferences for big announcements - a change from the past few Fed chairs who spoke to reporters four and then eight times a year after monetary-policy decisions. There are several reasons why this would be a step backwards. Public accountability First, the Fed's policy committee dropped this new phrase into its June statement: "The committee will deliver price stability." That pledge was unusual because it suddenly elevated inflation risks above the Fed's other mandate of maximum employment, after five years of price gains running higher than the central bank's 2% target. What's not well understood is how the Fed will achieve that goal. Until now, a wait-and-see posture in response to inflationary shocks, such as tariffs and a sharp rise in energy costs, hasn't worked. Inflation expectations for both one- and three-year horizons were up in a recent New York Fed survey. Credibility erodes when central banks announce goals without a strategy to achieve them. Right now, any decision on interest rates, including no change, is worthy of a press conference. The press conference also serves a larger purpose than the day's decision. It is one of the few public accountability mechanisms that the Fed participates in where the focus is mostly on monetary policy. Through the press conference, the Fed speaks to the broader public, and its fellow central bankers around the world, about the benchmark rate of interest on the world's reserve currency. What could be more important? Of all forms of Fed communication, the press conference was ranked as useful or extremely useful by 80% of private-sector respondents and 88% of academic or think-tank respondents - more valuable than testimony, the policy statement or most other forms of communication, according to a 2026 Hutchins Center on Fiscal and Monetary Policy survey. Historically, it has been up to Congress to oversee monetary policy through a semiannual hearing mandated by law. The Federal Reserve Act says the hearings will focus on the "conduct of monetary policy" as well as "economic developments and prospects for the future." A written Monetary Policy Report is required for each hearing, which typically occurs in February and July. Warsh is preparing to speak to the House Financial Services Committee on July 14. But what should be a strong monetary-policy accountability tool has devolved into a question-and-answer session guided by lawmakers' particular interests or the influence of interest groups. At Jerome Powell's House testimony in June 2025, there were questions on monetary policy, but also some on housing, digital assets and cybersecurity. Those topics are fair game for a Fed chair, but they highlight the postmeeting press conference's singular focus on monetary policy. Task forces Powell stepped up the frequency of press conferences to every meeting in January 2019 - a change from his two immediate predecessors, who held them four times a year. In making the change, he said he hoped "to foster a public conversation about what the Fed is doing to support a strong and resilient economy." Doubling the number of press conferences "will give us more opportunities to explain our actions and to answer your questions." That step put the Fed on a similar cadence with the European Central Bank, which also has a large, diverse constituency. Warsh has launched five task forces aimed at revamping how the central bank approaches monetary-policy decisions. One will focus on communications and will be led by former central bankers Mervyn King, Arminio Fraga and Peter R. Fisher, the Fed announced July 9. Ideally, the goal would be better - rather than less - communication, and there are plenty of suggestions, including a recent review of Fed practices by former Fed Chair Ben Bernanke. Rolling back the frequency of Fed press conferences will reduce policy transparency. That will create more costs for borrowers in the form of volatility and risk premiums, as investors guess at policy rationales and how the central bank will respond to recent data. The Dodd-Frank Act also showed that, eventually, the public and their representatives will demand more transparency when things go wrong. "Transparency and accountability are about more than just opening up the books," Bernanke said when he was Fed chair. "They also require thoughtful explanations of what we are doing and why." Transparency is even more crucial in an era of global regime change in technology, trade and global competition that touches all aspects of central-bank remits - from financial stability and inflation to economic growth and, in the Fed's case, employment. Craig Torres is editor-in-chief at the Andersen Institute for Finance and Economics. Previously, he was the principal Federal Reserve reporter for Bloomberg News for more than two decades. -Craig Torres This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal. (END) Dow Jones Newswires 07-10-26 0907ET