Starting next year, the Federal Reserve will reduce the number of meetings at which it sets interest rates, Kevin M. Warsh, the central bank’s chairman, announced Wednesday.
The Fed’s 12-member policy committee currently holds eight regularly scheduled meetings a year, a cadence it has maintained since the 1980s. Mr. Warsh, who took over as the Fed’s leader in May, raised the idea of reducing the number of meetings at the committee’s closed-door session in July, a discussion first reported by The New York Times and later confirmed in the publicly released minutes of the meeting.
In a news conference on Wednesday, Mr. Warsh said the Fed would meet eight times next year as usual. But only seven of those meetings will include a vote on interest rates. The eighth “will focus exclusively on broad monetary policy strategy,” he said.
In 2028, the Fed expects to hold just six rate-setting meetings, with two meetings dedicated to discussions of longer-run strategy, Mr. Warsh said.
“Getting policy right involves assessing near-term developments at timely, regular and information rich intervals,” Mr. Warsh said, “but it’s equally important we reserve time and space as an intellectually diverse group for strategic deliberations, for thinking anew about big questions, looking out over longer time horizons.”
Some economists have criticized the idea of holding fewer meetings, arguing it could make it harder for the Fed to respond quickly to changes in inflation and the labor market. The move also fits a pattern during the early months of Mr. Warsh’s chairmanship toward providing less information to investors and the public, reversing a decades-long trend toward greater openness.
Other economists, however, have defended the idea. They argue that providing more time between meetings will make it easier for policymakers to identify meaningful shifts in economic conditions. And they note that the Fed can hold emergency meetings if necessary, as it has done numerous times in the past.
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