The new Fed Chair surprises markets

Research evidence excerpt

The new Fed Chair surprises markets

FICC Research

Interest Rates

18 June 2026

Derivatives Strategy

The new Fed Chair surprises

markets

We think that the FOMC meeting marks a new Amrut Nashikkar

communications regime for the Fed and that the removal of +1 212 412 1848

amrut.nashikkar@barclays.com

forward guidance will lead to elevated top left volatility. In BCI, US

spreads, preserving the "ample reserves" regime is spread- Andres Mok, CFA

positive. +1 212 526 8690 andres.mok@barclays.com

BCI, US

Eveline Dong

+1 212 526 9576

The below is an extract from Warsh Fed: Into the unknown, June 17, 2026 eveline.dong@barclays.com

Options markets: A new communication regime

At the press conference of the June FOMC meeting, Fed Chair Warsh suggested he would like

markets to react more to data than Fed guidance:“I think financial markets perform best when

they react to incoming data. I think the financial markets work less efficiently when they ask a

question, how will the Federal Reserve react to that incoming information."

There are likely to be several changes in how the Committee and Fed chair Warsh will

communicate policy. Further, there is a strong signal in these changes, the announcement of a

review, as well as the the new Fed chair himself not submitting his own forecasts in the SEPs

because of his view that he does not find them useful. The changes to the FOMC statement are a

structural simplification, with most of the forward-looking language describing what the Fed

would do in reaction to potential developments removed, a change from the past couple of

decades of practice.

For the past few years, FOMC statements have laid out how the committee would assess

developments, whether risks were balanced, and how that balance would influence the path of

policy.