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Kevin Warsh, the new chairman of the US Federal Reserve (Fed), made it clear at the first interest rate decision under his leadership that he intends to communicate more concisely than his predecessors. The statement was shortened, forward guidance was dropped, and the press conference was shorter.

It is not the first time that the communication of the head of a leading central bank has caused a stir and sparked controversy, as a look at four examples from recent history shows.

Alan Greenspan before Congress in 2005. (Image: Shutterstock)

«Irrational exuberance.» With this phrase, then Fed chairman Alan Greenspan, who recently passed away, warned 30 years ago of what he regarded as a significant overvaluation of equities. Market participants interpreted his words as a warning and feared interest rate hikes. Two words sent stock markets around the world tumbling.

A small side note: The S&P 500 stood at around 750 at the time. Today, it is trading at more than 7,500 points – a tenfold increase.

Mario Draghi in 2012. (Image: Shutterstock)

«Whatever it takes.» In July 2012, Mario Draghi, then president of the European Central Bank (ECB), pledged that the central bank would do whatever was necessary to overcome the euro crisis. He added: «And believe me, it will be enough.»

It was merely a verbal intervention, rather than the announcement of a concrete monetary policy measure. And yet those now legendary words marked the beginning of the turning point in the euro crisis.

Ben Bernanke in 2011. (Image: Shutterstock)

Ben Bernanke, who chaired the Fed from 2006 to 2014, inadvertently caused market turbulence shortly after taking office. At a gala dinner, a CNBC journalist asked him whether the markets had interpreted his comments correctly. He replied «no». When CNBC reported the remark, markets reacted sharply.

Bernanke later called it «a lapse in judgement». One observer commented dryly at the time: «Central bankers shouldn’t go to parties.»

Jerome Powell in 2026. (Image: Shutterstock)

Jerome Powell, Warsh’s predecessor as Fed chairman – and still a voting member of the Federal Open Market Committee – surprised the markets twice in 2018.

In October, he remarked almost in passing during a panel discussion: «We are a long way from neutral at this point, probably.» The comment was interpreted as a signal that more substantial interest rate hikes were ahead. Markets reacted promptly, particularly equities, for which sharply rising interest rates are a major headwind. Powell’s casual remark contributed to the stock market correction in October 2018.

The reversal followed in November 2018. Powell then said that the policy rate was only slightly below the estimated neutral level, which neither supports nor restrains economic growth. Once again, the statement came as a surprise. Equity markets responded with gains. The second comment was probably more deliberate, as it can be assumed that Powell had learned from his «rookie mistake», as one analyst called it, and chosen his words more carefully.

Kevin Warsh in 2026, at his swearing-in ceremony. (Image: Shutterstock)

Kevin Warsh, the new chairman of the US Federal Reserve, is an avowed opponent of excessive communication. He had made his position clear even before taking office. And he has kept his word. The written statement following the first meeting under his leadership was considerably shorter than those issued under his predecessors. It omitted the forward guidance that US monetary policymakers had previously used to prepare markets for the future course of monetary policy.

Warsh also abstained from submitting his own assessment to the Fed’s projections, in which all members of the Federal Open Market Committee provide their estimates for economic growth, inflation and the expected path of interest rates. Finally, the press conference was significantly shorter than those held under predecessors Janet Yellen and Powell. Warsh again emphasized that the Fed intended to communicate less and in a more targeted manner in future.

Is Warsh therefore giving up a monetary policy instrument? No. For one thing, Warsh will continue to communicate – just less frequently and more selectively. For another, what is not said, or what is omitted, can often be just as revealing.

The Austrian-American philosopher Paul Watzlawick once argued that every action or inaction constitutes behavior. One cannot not behave. Even remaining silent or ignoring others is a non-verbal message that will be interpreted. Hence his famous dictum: «One cannot not communicate.» That applies to Kevin Warsh, too.

Thomas Heller has been chief economist at Frankfurter Bankgesellschaft Group since 2024. He has worked in the banking industry for more than 30 years. He began his career as an economist at Credit Suisse in 1994 and later worked for institutions including LGT and Schwyzer Kantonalbank.

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