Federal Reserve Chairman Kevin Warsh is weighing a major change to how often the central bank sets interest rates — a move that could reshape how investors interpret Fed decisions and potentially increase market volatility, including in crypto markets.
The Plan: Six Meetings Instead of Eight
Currently, the Federal Open Market Committee (FOMC) meets eight times a year, a schedule that has been in place since 1981. The Fed moved to its current eight-meeting schedule in 1981 as policymakers sought a more predictable approach to communicating monetary policy.
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Warsh’s proposal would reduce the number of meetings dedicated to interest rate decisions to six, while adding two separate gatherings focused on broader economic issues.
The idea was raised during last week’s FOMC meeting, and a final decision on the new schedule could be reached ahead of the committee’s mid-September meeting, even if the actual changes take effect later.
Under the Banking Act of 1935, the FOMC is legally required to meet at least four times a year, leaving room for a reduced schedule.
Part of a Bigger Shift at the Fed
The proposal is part of a wider push by Fed Chair Kevin Warsh to overhaul how the U.S. central bank communicates with markets.
Since taking office in May, Warsh has moved to streamline Fed messaging by shortening policy statements, reducing forward guidance on interest rates, and considering fewer post-meeting press conferences. He has also created five task forces to review the Fed’s communications, balance sheet, data practices and the role of AI in the economy.
Some regional Fed officials, including Neel Kashkari and Anna Paulson, have signaled they are open to the discussion.
What This Means for Crypto Markets
While the proposal doesn’t directly touch digital asset markets, its ripple effects could be felt there. Fewer meetings mean each Fed decision could carry more weight — markets would wait longer for clarity, and when it arrives, the reaction could be sharper.
Some market strategists argue that fewer scheduled decisions could make each policy announcement more consequential, potentially increasing volatility around Fed meetings.
For crypto investors, the concern is not the number of Fed meetings itself but the possibility that markets could face longer periods of uncertainty followed by sharper reactions when policymakers finally act.
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