Federal Reserve Chairman Kevin Warsh has set a one-year deadline for the U.S. central bank to identify and begin utilizing real-time economic data that surpasses current lagging indicators.
Speaking in Sintra, Portugal, on Wednesday, Warsh described the initiative as a critical step toward improving the precision of monetary policy decisions.
The push for better data infrastructure aligns with Warsh’s broader effort to modernize the Fed’s analytical framework.
By reducing reliance on backward-looking statistics, the central bank aims to react more swiftly to shifts in inflation and employment trends.
This structural change could reduce the lag between economic developments and policy responses, potentially lowering the risk of over- or under-tightening.
Warsh’s comments come as he continues to formalize his leadership transition, with plans to announce heads for new internal working groups in the near term.