Federal Reserve Chair Warsh drives policy framework adjustments, placing greater emphasis on financial conditions and downplaying forward guidance.

According to CNBC, Federal Reserve Chair Kevin Warsh, 127 days into his tenure, is gradually driving adjustments to the monetary policy framework, including weakening traditional forward guidance and incorporating broader "financial conditions"—such as asset prices, U.S. Treasury trading, dollar exchange rates, credit conditions, and commodity prices—into policy decision-making. Against the backdrop of inflation remaining above target, Warsh’s policy framework leaves room for further rate hikes; the Federal Reserve already raised rates by 25 basis points in September, marking the first increase since 2023. cnbc.com Meanwhile, the reform to reduce the Federal Reserve's balance sheet, which he has long advocated, is progressing slowly, with the central bank's balance sheet currently totaling approximately $6.7 trillion.