FED CHAIR WARSH EXPECTED TO WITHHOLD INTEREST RATE FORECAST

The Federal Open Market Committee will release its quarterly interest rate outlook on Wednesday, though most analysts expect Chair Kevin Warsh will not submit a forecast for the "dot plot" — the grid showing where individual officials expect rates to move. Warsh, who took office in May, may decline to participate because he believes he is not yet ready or because he objects to the forecasting method itself. Withholding a dot would mark a departure from practice established over 14 years following the financial crisis. The decision carries risks, as it could alienate FOMC members who support the dot plot as a communication tool with markets and the public.

Warsh has opposed the dot plot and other forward guidance methods, arguing they constrain the Federal Reserve's decision-making flexibility. Markets analyse the quarterly grid closely to gauge Fed officials' views on the economy and monetary policy direction. Some economists, including former Federal Reserve monetary affairs director Bill English, now at Yale, have suggested other committee members may also be willing to withhold dots if Warsh declines to submit one. The outcome could signal the beginning of fundamental changes to how the central bank operates under Warsh's leadership.

The move would represent a significant shift in Fed communication strategy if implemented. Financial markets depend on the dot plot to understand policy expectations through 2028 and beyond. Whether Warsh's potential non-participation influences broader committee behaviour remains to be seen when the FOMC concludes its policy meeting Wednesday.