Analysts and investors say Wosh’s upcoming remarks are an early test of whether
he will respond to rising market concern about his policy plans. The Fed has
missed its inflation target for 65 consecutive months, with little progress over
the past 18 months. Wosh has repeatedly pledged to achieve the Fed’s inflation
target since taking office but has offered no concrete path, prompting calls for
a shift in policy emphasis. Gregory Daco, chief economist at EY-Parthenon,
warned Wosh’s prior comments have been vague and said markets worry about Fed
independence and whether he might avoid discussing possible rate hikes to
place the Trump administration. Daco said Wosh must avoid signaling closer
coordination with the Treasury or that he is influenced by presidential
pressure. Speak too much and he risks creating hard-to-retract expectations or
unsettling markets; speak too little and he risks losing credibility and ceding
influence to other Fed officials. Either outcome could trigger market
volatility.
