Financial markets are always trying to anticipate what the Fed&#x27;s next move may be. Making an accurate prediction may become more challenging under new Federal Reserve Board Chair Kevin Warsh. Confluence Associate Market Strategist and Certified Business Economist Thomas Wash joins Phil Adler to discuss Warsh&#x27;s strategy and how it might impact investors.

Asset Allocation Bi-Weekly – In Warsh, We Trust? (7/20/26)

Confluence Podcasts

Welcome to the Confluence Investment Management Asset Allocation Bi-Weekly Report for July 20, 2026. I'm Phil Adler. Financial markets are always trying to anticipate what the Fed's next move may be. Making an accurate prediction may become more challenging under new Federal Reserve Board Chairman Kevin Warsh. Confluence Associate Market Strategist and Certified Business Economist Thomas Warsh joins us today to discuss Warsh's strategy and how it might impact investors. Thomas,

Warsh seems intent on making the Fed less transparent. As Warsh sees it, what's the problem? Hi, Phil, and thank you for having me. I think Fed Chair Kevin Warsh believes the Federal Reserve has drifted too far from its core mandate, which has severely eroded its credibility with markets. While he points to several drivers of this loss of credibility, such as an over-reliance on

backward-looking data and a perceived risk of politicization, he has particularly been critical of the Fed's communication strategy. In his view, market participants have become over-dependent on foreign guidance. To address this, he has established a task force to review the central bank's communication framework and determine whether it would be prudent to scale back or maybe even entirely eliminate foreign guidance. Let's go back a bit. How did the Fed arrive at this point where it became

perhaps too transparent? To understand where we are today, it helps to go back to the great financial crisis. You know, historically, the Fed used forward guidance very sparringly to nudge market expectations. However, that changed in 2008 when the Fed came under intense scrutiny and markets were dealing with a high degree of uncertainty. Now, during the time, Bernanke's response was to significantly increase transparency. He introduced regular press conferences, initially once a quarter,

Asset Allocation Bi-Weekly – In Warsh, We Trust? (7/20/26)

Read the full transcript

The candid version is on a podcast,
not the earnings call.

Asset Allocation Bi-Weekly – In Warsh, We Trust? (7/20/26)

Read the full transcript

The candid version is on a podcast, not the earnings call.

The candid version is on a podcast,
not the earnings call.