Warsh's communications task force is co-led by three people with loads of expertise in how a central bank talks to markets: • Peter Fisher (NY Fed from 1990-2001, the last half of that as the SOMA manager) • Arminio Fraga (governor, Central Bank of Brazil, 1999-2002) • Mervyn King (governor, Bank of England, 2003-2013) This trio, compared to the other four, is probably the most markets-facing of the bunch. Fisher ran the desk that actually executes the Fed's operations and later worked at BlackRock; Fraga came out of Soros and later founded the hedge fund Gávea. Fraga was parachuted into Brazil's central bank in early 1999, weeks after a currency crisis forced the real to float and sent it down more than 60% in a month. He stood up a full inflation-targeting regime in months, publishing explicit targets to give markets a new anchor after the old exchange-rate peg collapsed. King ran the Bank of England for a decade, through the 2008–09 crisis. He's since become one of the sharpest critics of "forward guidance"—the practice of signaling where rates are headed. In a 2022 paper he argued it had become a liability. His point: the future is uncertain, so a central bank shouldn't pretend to know its own next moves. Instead of talking about the modal rate path, the Fed should explain how it reacts to a changing economy. "The communications of a central bank need to focus on explaining its reaction function and developing a narrative about the state of the economy that changes over time meeting by meeting, report by report. The only forward guidance markets and economic agents need is an unswerving commitment to price stability." Link: https://mv-pt.org/wp-content/uploads/2022/01/2022-01-21-Annual-public-lecture-Lord-King-lecture-text-SCRIPT-v-2.pdf (It's worth noting, so far Warsh has sounded skeptical of spelling out that much, but it's early days.) King is also known for his "Maradona theory" of interest rates—the idea that a credible central bank, like the soccer star who beat defenders by running straight while they braced for a swerve, can move markets through expectations alone.(Nick Timiraos)