Federal Reserve chairman promises rethink on economic analysis

The last time the Federal Reserve conducted a comprehensive review of its monetary policy framework, Jerome Powell was running a central bank that had spent years undershooting its own inflation target. That was 2019. The review that followed produced a strategy update in 2020, and then inflation arrived anyway, blew past the 2% target, and stayed there for the better part of five years. Now it is Kevin Warsh’s turn, and he is not starting small. Warsh, who took over as Fed chairman in early 2026, used his keynote address at the Jackson Hole Economic Policy Symposium on August 28 to announce a sweeping internal review of the central bank’s operations, models, and analytical foundations. He framed it as a reckoning with institutional shortcomings that allowed inflation to run hot for far longer than the Fed’s own forecasts ever predicted. Five task forces, one mandate The review is structured around five dedicated working groups, each assigned a distinct slice of the Fed’s operational machinery. The task forces will examine the inflation framework itself, the quality and sourcing of economic data, how the Fed measures productivity and employment, its communications strategy, and bal...