WASHINGTON ¨C Federal Reserve Chairman Kevin Warsh opened a new era of U.S. monetary policy on Wednesday, with officials agreeing to leave interest rates unchanged despite inflation stuck well above their target but also launching an ambitious review that could reshape how the central bank makes decisions and communicates with the public.

Warsh, who took over as Fed chief last month, made an immediate imprint in organizing a unanimous consensus around a stripped-down policy statement that jettisoned any forward guidance on what actions the central bank might take in the near term, although new quarterly projections, eschewed by Warsh himself, showed nine of 19 policymakers now anticipate a rate hike by the end of 2026.

Indeed, the shortened ?document issued by the policy-setting Federal Open Market Committee heralded a return to a format similar to that used by former Fed Chairman Alan Greenspan and clearly reflected Warsh¡¯s disdain for expansive communication about what¡¯s to come, and ?desire to ?let financial markets act with less input from the central bank.

Forward guidance, Warsh said at his debut press conference, is not ¡°well suited¡± to the current economic moment.

¡°I can¡¯t give ?you any forward guidance about what we¡¯re going to do next,¡± he said. ¡°The good news is we¡¯ll be meeting in six weeks,¡± a refrain that may become his calling card when asked about the future.

The statement¡¯s description of the economy also showed Warsh¡¯s influence, touching on issues he has emphasized in the run-up to his nomination by President Donald Trump. ¡°Productivity growth and capital investment are strong,¡± the statement said, and while acknowledging inflation was ¡°elevated relative to the ?Committee¡¯s 2% goal,¡± it attributed that in part to ¡°supply shocks that have driven price increases in certain sectors, including energy.¡±

In the midst of a hawkish policy turn, the language highlighted forces that Warsh has argued could allow rates to fall over time, if ?productivity lets companies provide goods and services more efficiently, and the easing of energy costs helps lower inflation. The statement marks a turning point not just in leadership at the central bank but in a monetary policy outlook that since the fall of 2024 had been geared to lower borrowing costs from the elevated rates used to help tame inflation that hit 40-year highs during the COVID-19 pandemic. Fed ?observers took immediate note of the shift.

¡°The changes to the policy statement were ?profound,¡± Thomas Simons, chief U.S. economist at Jefferies, wrote in a note. ¡°The word count dropped substantially and the modest amount of forward guidance present showed two-way risks to the next move for policy. Policy statements became much wordier after the GFC (Global Financial Crisis), so this is a return...