Odd Lots · Monday, August 31, 2026
Richmond Fed President Tom Barkin expressed a nuanced view on Federal Reserve communication, supporting transparency to build credibility while acknowledging Chairman Warsh's caution against excessive forward guidance that can lead to suboptimal policy decisions. Barkin also finds value in the internal process of creating the Summary of Economic Projections (SEP), even if the dot plot aspect can sometimes overshadow the narrative.
“One is, if we're relatively transparent about how we think about things, that helps build credibility with the public. It helps build trust in the institution. And it helps markets do some of the work for you. That's the famous Bernanke theory. I also 100% agree with Chairman Warsh when he says, sometimes if you give too much forward guidance, you get stuck in it and you end up, having to make a suboptimal decision because you've misguided.”
“The one thing I don't like about the SEP is I think the dot plot itself is a picture that overwhelms the story. And I've said this in other forums, but you know, the, if what comes out as I go do a chamber of commerce in Greensboro and somebody says to me, well, I see the Fed promised two more rate cuts this year, then that's not good communication because that's not what we've done. We've done a set of forecasts independently.”