Warsh shakes up Fed analysis, maintains interest rates

"Inflation remains elevated relative to the Committee's 2 percent goal, in part reflecting supply shocks that have driven price increases in certain sectors, including energy," the members wrote. "The Committee will deliver price stability."

Warsh also announced five new task forces that will be designed to deliver greater communication about economic data and the Fed's decision making process. He said the Fed will add task forces on communciation, the balance sheet, use and reliance on existing data, productivity and jobs and inflation. 

Each task force will be made up of individuals inside and outside of the economics profession and subject matter specialists from the Fed's staff, Warsh said. 

"They'll have a straightforward charge: start with first principles, ask hard questions, examine current practice, consider alternatives, and ultimately propose next steps for policymaker consideration," Warsh said in a press conference. 

The five task forces will make meaningful changes the to Fed's policies and communications over the next several weeks. He said members of the Fed have discussed improvements in communications over the past year. 

Jeffrey Roach, chief economist at LPL Financial, said the changes in communication under Warsh are evident. The Fed's statement on interest rates was 130 words, compared to the last statement from former chairman Jerome Powell at 341 words. 

"For his first meeting, Chair Warsh opted to keep things at a minimum, including the length of that last sentence. 'The Committee will deliver price stability,'" Roach said. 

The balance sheet task force will assess different frameworks for the operation of monetary policy, Warsh said. 

The data task force will use various new sources to evaluate the state of the economy and make decisions on monetary policy. Warsh has previously advocated for the use of public and private data sets to determine interest rate cuts. 

The task force "will evaluate new information sources and consider methodological changes to improve data gathering, with the aim of giving policymakers more accurate, relevant, contemporaneous, and perhaps most important, actionable information on the state of our economy," Warsh said. 

The task force on jobs and productivity will focus on how technology has changed the work force, including the implementation of artificial intelligence. The task force on inflation will analyze certain drivers of inflation and seek to deliver greater stability in prices, Warsh said. 

"Each task force will serve an objective shared by everyone in the system, shared by everyone around that table that I sat with over the last couple of days: A Federal Reserve that is clear-eyed about its mission, fit for purpose, and focused on the future," Warsh said. 

Warsh also said the Federal Reserve inspector general would release a report later in the summer on the taxpayer costs of the Central Bank's recent renovation. Last summer, planned renovations to the Central Bank came under fire by President Donald Trump and lawmakers in Congress for alleged cost overruns.

"Is there anything that we can be doing, or should be doing from this moment until the completion of the project, to do what we can to be good stewards of taxpayer money, and make sure that we're delivering on the promises that we made," Warsh said.