Federal Reserve Chair Kevin Warsh is considering reducing the number of annual Federal Open Market Committee meetings, a move that could further diminish transparency and increase market volatility. The FOMC has met eight times per year since 1981, with federal law requiring at least four meetings annually. Warsh has already removed forward-looking guidance from FOMC statements, a break from more than two decades of tradition, which has contributed to a significant rise in long-term Treasury bond yields. Analysts warn that fewer meetings would give markets even less data, potentially leading to wilder swings in the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite, and higher borrowing costs as bond traders err on the side of caution amid above-average inflation.
Fewer FOMC meetings reduce transparency and increase market volatility, likely raising bond yields.
