While the Fed is widely expected to keep interest rates unchanged, market focus has shifted to whether the new chair will begin redefining how the central bank communicates.

Kevin Warsh is chairing his first Federal Reserve policy meeting, concluding today, with investors paying less attention to the rate decision and more to any signals about his broader communication strategy.

Markets expect the benchmark rate to remain in the 3.50%–3.75% range.

Still, Bank of America anticipates a more hawkish tone from Warsh and other policymakers, citing stronger-than-expected economic data and ongoing inflation pressures.

The bank also expects the Fed to drop language suggesting a bias toward rate cuts and to upgrade its view of the labor market following recent upside surprises in payrolls. Markets have already priced in a high probability of at least one rate hike this year.

However, the main story may be Warsh himself.

He has repeatedly criticized the Fed’s heavy reliance on forecasts, speeches, and forward guidance. A recent Wall Street Journal profile underscored his view that the central bank should communicate less and focus more on analysis.

That stance could be reflected in this meeting. Bank of America noted that Warsh may opt not to submit his projections to the Summary of Economic Projections (SEP), reinforcing his skepticism toward the Fed’s forecasting framework.

Warsh has argued that if forecasting tools are unreliable, their use should be reduced. The SEP’s “dot plot,” which outlines policymakers’ rate expectations, remains a key communication tool, with projections expected to show rates holding steady through 2026 before modest cuts in 2027 and 2028.

Policymakers are also expected to acknowledge rising inflation risks while signaling a lower tolerance for price shocks than in recent years.

Warsh’s first press conference as chair is likely to draw close scrutiny. He is expected to adopt a patient tone, suggesting that inflation pressures tied to geopolitical tensions, including the Iran conflict, may be temporary, while avoiding any indication that rate cuts are imminent.

Markets remain split on whether Warsh will ultimately lean more hawkish or dovish than his predecessor, Jerome Powell. According to Bank of America, that uncertainty represents a key risk for investors.

A more hawkish-than-expected stance could strengthen the U.S. dollar and weigh on equities and bonds. At the same time, investors will be watching whether Warsh uses this meeting to initiate a broader shift in how the Fed communicates after years of elevated transparency.

Bitcoin, down roughly 25% year-to-date, has also declined since Warsh took office on May 22, as geopolitical tensions—particularly the U.S.-Iran conflict—continue to overshadow domestic economic policy.