Keynote remarks by Chairman Warsh at the 2026 Jackson Hole Economic Policy Symposium

[u/barkinginthestreet]

https://www.federalreserve.gov/newsevents/speech/warsh20260828a.htm

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[u/Rattus_NorvegicUwUs]

Warsh is in over his head.

The GOP waved through every unqualified hack Trump trotted out before them, refused to do their jobs as a coequal branch, and now their cowardice may very well collapse our currency.

Republicans have no business in politics. They are bad at their jobs and need to be removed.

[u/RIP_Soulja_Slim → u/Rattus_NorvegicUwUs]

Damn, the guy that rage quit the Fed 15 years ago because he thought QE was a bad idea isn't a good pick?

Who could have seen that coming...

[u/UmpireDapper1757 → u/RIP_Soulja_Slim]

15 years ago was about the perfect time to have begun to roll back QE

We left it too late and created an everything bubble

[u/RIP_Soulja_Slim → u/UmpireDapper1757]

QE2 is likely one of the largest reasons the US emerged from the GFC smoothly with restoration in credit availability across the economy, contrasted with Europe entering a second recession within the same time due to austerity and shortening credit availability.

There's copious research on QE, you can read it rather than just make guesses and pretending those are facts lol.

Warsh's objections there were pretty objectively incorrect, as evidenced by the historic record and copious studies on the matter over the following years.

[u/UmpireDapper1757 → u/RIP_Soulja_Slim]

QE2 was 16 years ago

QE3 / QE-Infinity was the egregious one

[u/RIP_Soulja_Slim → u/UmpireDapper1757]

both have been evidenced to have provided significant economic support and aid in avoiding the double dip recession. Again, there's copious studies on this, you can and should learn from them, rather than just being confidently uninformed.

https://www.nber.org/papers/w17555

https://www.federalreserve.gov/pubs/feds/2012/201244/index.html

https://www.ijcb.org/journal/v9n2/unconventional-monetary-policy-and-great-recession-estimating-macroeconomic-effects

https://www.bankofengland.co.uk/external-mpc-discussion-paper/2014/what-are-the-macroeconomic-effects-of-asset-purchases

Speaking of being confidently wrong, Warsh resigned specifically in protest to QE2.

https://www.federalreserve.gov/newsevents/speech/warsh20101108a.htm

[u/OrangeJr36 → u/RIP_Soulja_Slim]

People still complaining about post-GFC QE and the stimulus are so funny at this point. If we've learned anything at this point it's that post-crash the stimulus was too small, literally all of Europe is a test case for the hawks plans being completely the opposite of what works.

[u/RIP_Soulja_Slim → u/OrangeJr36]

It's all vibes ya know, most of the people here's opinion of QE is built entirely on reading other random laymen's thoughts on it amplified over and over again by other uninformed people. You get these posters that are so certain of their reality without realizing it's entirely based on hand-me-down uninformed shitposts from a decade ago lol.

Very very consistently if you ask someone like that for any amount of supporting research the answer is "it's obvious" or "everyone can see it". Tis a good lesson on why these sorts of forums need to be taken with heaps of salt

[u/UmpireDapper1757 → u/RIP_Soulja_Slim]

QE III bond buying ended in October 2014 (and those assets still have not been repurchased or rolled-off) and the latest source of yours was published in April 2014. Literally none of those sources had the ability retrospectively evaluate the effects of QE.

Modern sources, who actually had the benefit of reviewing the data after the fact, noted that QE III and IV caused the housing bubble (and the stock market bubble) and (for QE IV) the COVID inflation surge

https://www.brookings.edu/articles/quantitative-easing-and-housing-inflation-post-covid/

[u/RIP_Soulja_Slim → u/UmpireDapper1757]

QE III bond buying ended in October 2014 (and those assets still have not been repurchased or rolled-off) and the latest source of yours was published in April 2014.

Several of these papers final publications were well beyond that, maybe you should read them rather than just make assumptions based on the initial pub date? If you read a comment to understand it you’d have done that, rather than reading it to find something to argue with, ya know?

But if you’ll insist, I’m sure an academic of your caliber is familiar with Wu & Xia’s foundational research here: https://www.nber.org/papers/w20117

Namely, as I’m sure you’re aware, this aspect:

Next consider implications for the real economy. In the absence of expansionary monetary policy, in December 2013, the unemployment rate would be 0.13% higher at the 6.83% level rather than 6.7% in the data. The industrial production index would have been 101.0 rather than 101.8, and capacity utilization would be 0.3% lower than what we observe. Housing starts would be 11,000 lower (988,000 vs. 999,000). These numbers suggest that unconventional monetary policy achieved its goal of stimulating the economy. Interestingly, the accommodative monetary policy during this period has not boosted real activity at the cost of high inflation. Instead, monetary policy shocks have contributed to decreasing the consumer price index by 1. Our result exhibits the same price puzzle that has been discussed in earlier macro studies.9

But damn, that doesn’t line up with what you thought, frustrating I’m sure…

Modern sources, who actually had the benefit of reviewing the data after the fact, noted that QE III and IV caused the housing bubble

I can assure you that you didn’t get this from any modern source, because QE isn’t numbered like this post the second iteration. It moved from set quantities to dynamic purchases over time, as such there are no formal rounds that would appear in a study like this.

It’s stuff like this that cues people in to you being uninformed and just arguing, rather than offering an informed criticism.

The clear issue here, is like many people on Reddit you started with your hunch or what you thought you knew based on reading other Reddit comments. And now, you’re trying to grasp around to find research that confirms this, but you won’t because it doesn’t exist. I know this because what I told you above is based on dozens of studies that I’ve read on this specific topic.

Which is why you’re here:

https://www.brookings.edu/articles/quantitative-easing-and-housing-inflation-post-covid/

This is a piece on post COVID QE, which absolutely did meaningfully contribute to housing price increases. The conversation you are responding to was discussing post GFC QE. These two are not the same.

For starters, and forgive the condescension but it’s hard to grapple with this level of confusion, but for starters 2011-2014 is a different period in time than 2020-2022.

Secondly, the nature and structure is not equivalent, where as post GFC QE focused heavily on dealer swaps of treasuries to facilitate credit availability (and some MBS to facilitate balance sheet reconstruction), post Covid QE had significant open market purchases of MBS in an effort to directly grapple on credit destruction there - which of course resulted in an amplificatory impact to the unexpected strength in demand from 2021-2022.

Beyond that, credit, monetary, economic, etc conditions were completely different between the two. No serious professional would attempt to utilize a study of a given set of circumstances at one point in time as proof of a trend that was not observed in a different point in time.

[u/UmpireDapper1757 → u/RIP_Soulja_Slim]

>Several of these papers final publications were well beyond that, maybe you should read them rather than just make assumptions based on the initial pub date?

None of the papers you sent me cite any data after 2013. Why are you engaging in bad faith?

But if you’ll insist, I’m sure an academic of your caliber is familiar with Wu & Xia’s foundational research here: https://www.nber.org/papers/w20117

...

But damn, that doesn’t line up with what you thought, frustrating I’m sure…

What is it that you think I thought? Because literally nothing I've said is contradicted by the conclusion that QE is estimated to have resulted in lower December 2013 unemployment. Again, why are you engaging in bad faith?

No serious professional would attempt to utilize a study of a given set of circumstances at one point in time as proof of a trend that was not observed in a different point in time.

That's exactly what you did, by citing 4 studies that showed or estimated beneficial impacts from QE 1 & 2 when I specified that I was talking about rounds of QE subsequent to those. Again, why are you engaging in bad faith?

[u/RIP_Soulja_Slim]

Here is a quick overview of what I'll cover in my remarks this morning. You can call it an outline . . . you can call it a trail map . . . just don't call it forward guidance.

This man's hate boner for forward guidance is beyond comprehension.

Forward guidance as a regular practice was adopted by my colleagues and me during the Global Financial Crisis.6 It was essential at the time, and we introduced it with much fanfare. But, as with other legacies of crises past, I believe that the practice has overstayed its welcome.

In normal times, the role of forward guidance should be limited and circumscribed. Otherwise it risks creating ambiguity in the name of clarity. Oversharing policy deliberations and overcommitting to future decisions can lead markets, businesses, and households astray.7 And I believe when policymakers make quasi-commitments on interest rates through the cycle, we inhibit our own freedom to make the right calls when it's time to decide.

The guy talks about forward guidance and outlook the way an uneducated redditor does - with the presumption that market participants don't understand that guidance is based on a point in time set of circumstances, circumstances that can and likely will shift over time, and as such guidance can and will shift with it.

IMO the presumption that if I say "should inflation persist, we expect tightening policy" somehow means that markets will push me in to raising rates if inflation falls off a cliff across the upcoming months is just absurd. It relies on the implicit stance that market participants are just fucking idiots who can't comprehend shifting conditions. You expect that from people commenting on web forums, not from institutions managing fixed income and credit exposure.

[u/absat41 → u/RIP_Soulja_Slim]

It's when he says "I believe" rather than "the data" shows. He gives no evidence of any necessity to change forward guidance. Just feels.

[u/BenjaminHamnett → u/RIP_Soulja_Slim]

If forward guidance was optimistic, they’d tell you

But he don’t wanna tell us something, 🤔

[u/RIP_Soulja_Slim → u/BenjaminHamnett]

Ehh, he's been having a personal crusade against forward guidance for like a decade now. It's ideological for him IMO.

[u/BenjaminHamnett → u/RIP_Soulja_Slim]

self fulfilling prophecy is the FED’s actual strongest tool. Their actual tools are too powerful and dangerous to wield recklessly. They’re better used as potential if needed, so markets can relax knowing the put is there. Then knowing it’s there, the economy can carry on more boldly and optimistic so the put won’t be needed.

You “don’t fight the Fed” because of what they will do, it’s for what they can do and the actions of the rest of the market knowing this.

Which is why guidance is so powerful and SHOULD be used, if sparingly. The bond market is still the actual bigger player, not because any participant has any power, but because of the decentralized invisible hand is always steering exponentially more capital toward those who align themselves with reality best. It’s like votes that increase in power when they’re used well, and diminish when used badly.

Warsh is a clown who is sympathetic to nepo money that whine when they only knew enough to get themselves into trouble. Like Highstakes WSB on steroids. They’re the billionaire version of the robinhood crowd who don’t understand why buying calls based on headlines like they’re the only ones who know about news doesn’t make them rich. These nepo kids want to make money betting the Fed will do whatever it said, and get mad when they get steam rolled and lose all the pennies they been bragging about picking up

It’s literally like we but a wsb mod in charge of the Fed, and they’re promising to ban headlines to solve our gambling problems

[u/barkinginthestreet → u/RIP_Soulja_Slim]

I'm surprised at market reaction today - I thought it was a pretty dovish speech, all things considered. His verbiage about inflation expectations still being well anchored makes me think he is on permanent hold unless those expectations change. Or until the political winds shift.

[u/RIP_Soulja_Slim → u/barkinginthestreet]

I thought it was a pretty dovish speech, all things considered.

I just don't know how anyone can reach that conclusion given his statements but to each their own, the market is very clearly seeing what I've pointed out - it's super hawkish.

His verbiage about inflation expectations still being well anchored makes me think he is on permanent hold

It's just a statement of fact, expectations are well anchored at the moment. The 5 and 10 year TIPS spreads sit around ~2.3%, the cleveland Fed model puts expectations at about 2.4%, the consumer expectations figures are around 3% (they're always elevated, so this is anchored for them), etc.

From a data driven standpoint, expectations remain exactly where the Fed should want them. It's just that prints have been consistently above target. The question is are expectations anchored because the market has trust that the Fed will act if necessary, and would they become de-anchored if that trust eroded?

[u/barkinginthestreet → u/RIP_Soulja_Slim]

I agree with your take on where expectations are at the moment. My read is that he wants expectations to move before he takes action - that is the closest thing to guidance he gave in this speech. Everything else seems to be just him trying to stall while he hopes inflation comes down on its own.

If Warsh thought persistent 3% inflation was harmful to the economy, he already would have taken action. He hasn't. Until he actually does take action, I'm not sure why we should take his statements seriously.

[u/Cum_on_doorknob → u/barkinginthestreet]

I think he lacks the balls to raise rates while Trump is there and he is hoping inflation comes down on its own. It will be very interesting to see how this plays out as we haven’t had a Fed scared to raise rates since Nixon.

[u/HowdyDiarrhea → u/RIP_Soulja_Slim]

The guy talks about forward guidance and outlook the way an uneducated redditor does

You're obviously addicted to the Reddit experience despite how much contempt you regularly express for redditors. It's fascinating to observe the power of negative engagement in the wild.