Warsh's Taskforces And Plausible Deniability

As the Fed's previous cover for maintaining loose policy—a cooling labor market—disappears, Kevin Warsh has initiated five task forces to potentially provide new 'plausible deniability' for avoiding rate hikes. The author remains skeptical, arguing that the selected participants largely mirror existing biases and that the underlying inflation data necessitates a tighter policy stance.

Key Takeaways

• 1.The concept of 'plausible deniability' used by the Fed to justify holding off on rate hikes amid inflation concerns is evaporating as the US labor market reaccelerates.
• 2.Kevin Warsh's newly formed Fed task forces are likely a strategic attempt to create a new form of plausible deniability to avoid hiking rates, rather than a genuine shift in policy direction.

Table of Contents

• Productivity and Jobs Task Force
• Communications Task Force
• Balance Sheet Policy Task Force
• Data Task Force
• Inflation Frameworks Task Force

Document Preview

Page 1 of 5

Subscribe for full accessStart Free Trial