Federal Reserve Chairman Kevin Warsh has steered the central bank into an era of less transparency. Former Fed governors Donald Kohn and Stephen Miran, as well as Goldman Sachs Chief Economist and Head of Goldman Sachs Research Jan Hatzius, discuss on the Goldman Sachs Exchanges podcast the merits of Fed communication and how it affects financial markets. The episode is based on the latest Top of Mind report. Key takeaways: Kohn says there is a “golden mean” in which financial markets have some information from the Fed, such as a narrative that helps investors process incoming data, without central bank officials providing too much specific information about their policy plans. Reducing forward guidance would improve the signal that financial markets provide, and the additional volatility is worth the trade-off, Miran says. He argues that too much guidance from Fed officials can increase volatility in the longer run. Hatzius says markets will always price what they think the Fed will do—not what they think the Fed should do—even if the central bank provides less information about how it adjusts policy in reaction to economic data. This episode was recorded in August 2026. The opinions and views expressed herein are as of the date of publication, subject to change without notice, and may not necessarily reflect the institutional views of Goldman Sachs or its affiliates. The material provided is intended for informational purposes only, and does not constitute investment advice, a recommendation from any Goldman Sachs entity to take any particular action, or an offer or solicitation to purchase or sell any securities or financial products. This material may contain forward-looking statements. Past performance is not indicative of future results. Neither Goldman Sachs nor any of its affiliates make any representations or warranties, express or implied, as to the accuracy or completeness of the statements or information contained herein and disclaim any liability whatsoever for reliance on such information for any purpose. Each name of a third-party organization mentioned is the property of the company to which it relates, is used here strictly for informational and identification purposes only and is not used to imply any ownership or license rights between any such company and Goldman Sachs. A transcript is provided for convenience and may differ from the original video or audio content. Goldman Sachs is not responsible for any errors in the transcript. This material should not be copied, distributed, published, or reproduced in whole or in part or disclosed by any recipient to any other person without the express written consent of Goldman Sachs. Disclosures applicable to research with respect to issuers, if any, mentioned herein are available through your Goldman Sachs representative or at http://www.gs.com/research/hedge.html. Learn more about your ad choices. Visit megaphone.fm/adchoices

How Will Less Fed Transparency Affect Markets and the Economy?

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Federal Reserve Chairman Kevin Warsh has steered the central bank into an era of less transparency. Former Fed governors Donald Kohn and Stephen Miran, as well as Goldman Sachs Chief Economist and Head of Goldman Sachs Research Jan Hatzius, discuss on the Goldman Sachs Exchanges podcast the merits of Fed communication and how it affects financial markets. The episode is based on the latest Top of Mind report.   Key takeaways:      Kohn says there is a “golden mean” in which financial markets have some information from the Fed, such as a narrative that helps investors process incoming data, without central bank officials providing too much specific information about their policy plans.    Reducing forward guidance would improve the signal that financial markets provide, and the additional volatility is worth the trade-off, Miran says. He argues that too much guidance from Fed officials can increase volatility in the longer run.     Hatzius says markets will always price what they think the Fed will do—not what they think the Fed should do—even if the central bank provides less information about how it adjusts policy in reaction to economic data.    This episode was recorded in August 2026.   The opinions and views expressed herein are as of the date of publication, subject to change without notice, and may not necessarily reflect the institutional views of Goldman Sachs or its affiliates. The material provided is intended for informational purposes only, and does not constitute investment advice, a recommendation from any Goldman Sachs entity to take any particular action, or an offer or solicitation to purchase or sell any securities or financial products. This material may contain forward-looking statements. Past performance is not indicative of future results. Neither Goldman Sachs nor any of its affiliates make any representations or warranties, express or implied, as to the accuracy or completeness of the statements or information contained herein and disclaim any liability whatsoever for reliance on such information for any purpose. Each name of a third-party organization mentioned is the property of the company to which it relates, is used here strictly for informational and identification purposes only and is not used to imply any ownership or license rights between any such company and Goldman Sachs.     A transcript is provided for convenience and may differ from the original video or audio content. Goldman Sachs is not responsible for any errors in the transcript. This material should not be copied, distributed, published, or reproduced in whole or in part or disclosed by any recipient to any other person without the express written consent of Goldman Sachs.    Disclosures applicable to research with respect to issuers, if any, mentioned herein are available through your Goldman Sachs representative or at http://www.gs.com/research/hedge.html.  Learn more about your ad choices. Visit megaphone.fm/adchoices

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