The possibility of reducing the U.S. Federal Reserve’s rate-setting meetings from eight to six per year is emerging as a serious prospect. With at least six regional Federal Reserve Bank presidents voicing support for the idea first proposed by Chair Kevin Warsh in July, efforts to reshape the Fed’s policy decision framework are taking concrete form.
According to Bloomberg on the 9th (local time), six regional Fed presidents—including Beth Hammack of Cleveland, Jeffrey Schmid of Kansas City, and Anna Paulson of Philadelphia—have signaled openness to reducing the number of regularly scheduled meetings. That represents more than a third of Fed insiders willing to entertain the proposal.
Paulson said in an interview last month that “taking a fresh look at how we do our work is a great thing,” adding she is “open-minded on that issue, just like on monetary policy.” She noted she wants “to better understand the pros and cons of six versus eight, and how everything would work.”
Warsh’s proposal goes beyond simply cutting the number of meetings. Rather than merely reducing rate-setting sessions to six per year, he has suggested converting two additional meetings into forums for substantive economic discussion. Minutes from the July meeting recorded that “the Chair noted that six meetings a year, held roughly every other month, would allow for more information to be acquired between meetings and give policymakers and staff more time to review strategic monetary policy issues.”
The proposal could be discussed as early as the policy meeting scheduled for two days beginning on the 15th. However, the central agenda for that gathering is whether to raise interest rates for the first time in three years. With elevated inflation pressures demanding attention, the prevailing view is that structural reform discussions are unlikely to advance to a full review stage at this meeting.
A Shift From the Eight-Meeting Schedule Maintained Since 1981
The Fed is legally required to hold four meetings a year, but the actual number has been adjusted multiple times over the decades. With the eight-meeting schedule in place for nearly 45 years since 1981, any change would represent a significant shift in how the U.S. central bank operates.
A change in meeting frequency would also affect the materials the Fed releases at its gatherings. The Fed currently publishes economic projections and rate forecasts four times a year, at the March, June, September, and December meetings. Under a six-meeting system, whether to continue publishing these projections—and how frequently—becomes a key point of contention.
Austan Goolsbee, president of the Chicago Fed, said on a Bloomberg podcast last month that he thinks a communications review and potential changes to meeting frequency, economic projections, and post-meeting press conferences are “a healthy thing,” adding, “Let’s rethink all of it.”
Comparisons with major overseas central banks are also drawing attention. The European Central Bank (ECB), Bank of England (BOE), and Bank of Japan (BOJ) all hold eight meetings a year. If the Fed moves to a six-meeting schedule, it would set itself apart from its global peers.
The push to reduce meetings aligns with Warsh’s philosophy of a “less talkative central bank.” At his first meeting as chair in June, he issued a condensed statement that stripped away much of the boilerplate language that had accumulated over the years. He has also declined to commit clearly to continuing the practice of holding a press conference after every meeting beyond this year.
This approach stems from past experience. In 2014, at the request of then-Bank of England Governor Mark Carney, Warsh conducted a review of transparency practices and recommended reducing the number of meetings. The idea was to cut from 12 to eight meetings a year to give policymakers time to digest incoming data. The logic was that the economy rarely changes fast enough to warrant monthly policy adjustments—and the Bank of England ultimately adopted the recommendation.
Vincent Reinhart, chief economist at BNY Investments, said reducing the number of meetings could help shield the central bank from political pressure by lowering the profile that attracts scrutiny from lawmakers and the White House. “If you go from eight events to six events, the net effect is the amount of attention the Fed gets goes down,” he said. The former senior Fed staffer added that “it reduces the target painted on the Fed’s back.”
Details Still in Early Stages
The Fed’s policy committee has not yet discussed specifics. Even some of those who have expressed openness to the overhaul say they want further analysis of the trade-offs and a review of whether the change should be bundled together with adjustments to the Fed’s communications strategy.
Warsh has assembled five review groups of outside experts this year to evaluate the Fed’s operating practices broadly. A special communications task force examining how information is disclosed is studying the frequency of economic projections, and all five groups are expected to submit final recommendations to the Federal Open Market Committee (FOMC) around year-end.
There are many hurdles to clear before meeting reductions become reality. Redesigning the economic projections framework, adjusting press conference schedules, and changing how the Fed communicates with markets are all intertwined. While the Fed focuses on the more urgent task of a potential rate hike at this week’s meeting, discussions on restructuring the meeting format are likely to proceed at the internal review level for the time being.