Wall Street Is Preparing for Kevin Warsh’s First FOMC Meeting as Head of the Fed

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The Federal Open Market Committee (FOMC) meets for the first time this week under new Federal Reserve chair Kevin Warsh. With the labor market looking solid but inflation jumping to a three-year high of 4.2% in May, a rate cut likely isn't in the cards. As of Friday, CME FedWatch puts the probability of the Fed holding rates steady at nearly 99% for this meeting, and 92% for the one in July.

But it's not necessarily the direction of interest rates this month that investors, economists and all the experts in between will be paying attention to. It's what Warsh says about where rates are heading, and how he says it.

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For eight years, Wall Street navigated a Jerome Powell-led Fed as he "revolutionized the way Fed chairs communicate with the public," David Rubenstein, co-founder of the Carlyle Group recently said in an interview with CNBC. Former Fed Chair Ben Bernanke held the first post-FOMC press conference in 2011, kicking off a quarterly tradition. Powell was the first Fed head to talk to the media after every meeting. "Jay Powell has brought transparency to the Fed and I think that's a good thing," Rubenstein said.

Not everyone agrees. During his confirmation hearing, Warsh criticized FOMC members for essentially talking too much about which direction they think interest rates should go. He didn't say he would get rid of the press conferences, and one is slated for Wednesday, but it wouldn't come as a surprise if he keeps the public at arm's length.

Time will tell, but all eyes will be on the central bank by mid-week: