Kevin Warsh, who took over as Fed chairman in early 2026, announced a sweeping internal review of the Federal Reserve’s operations, models and analytical foundations during a keynote address at the Jackson Hole Economic Policy Symposium on August 28. The review follows the Fed’s 2019 framework assessment, which produced a 2020 strategy update before inflation exceeded the 2% target and remained above it for much of the next five years. Five task forces will examine the inflation framework, economic data quality and sourcing, productivity and employment measurement, communications, and balance sheet policy. The review is the most significant examination of Fed policy since the central bank formally adopted its 2% inflation target in 2012. PCE inflation, the Fed’s preferred measure, is running at 3.7% on an annualized basis and 4.1% on a semi-annual basis. Warsh’s announcement also highlighted declining response rates in survey-based data and the potential use of higher-frequency, more granular alternatives. He signaled less reliance on forward guidance (public indications of future interest-rate policy). The 2% target will not be reconsidered, while the Fed’s reaction function (how policy responds to incoming data) is being reconstructed. A more data-dependent central bank that relies less on forward guidance may be harder for investors to predict at individual policy meetings.