New Fed Chair Kevin Warsh Has Refused to Give Forward Guidance for 2 Straight Meetings. Here's Why That Should Worry Markets.
The results could be a disaster for stock market investors.
Overview
If you ever have to deliver bad news to someone, it's almost always a good idea to signal in advance that bad news is coming.
This can be as simple as starting with "I'm afraid I have some bad news for you..." or adopting a serious tone of voice or facial expression. These cues help the listener to emotionally prepare themselves for what's coming.
Details
The Federal Reserve used to do something similar with monetary policy, offering forward guidance on what to expect at its next Federal Open Market Committee (FOMC) meeting, where benchmark interest rates are set. But new Fed Chair Kevin Warsh has rejected that practice, refusing to offer any indications at all about where interest rates might be heading.
Source
Originally published at www.fool.com.