Kevin Warsh has done something no Fed chair has attempted in the modern era: He has effectively turned off the microphone. By stripping forward guidance out of the central bank’s June statement and declining to submit his own dot in the Summary of Economic Projections, Warsh has signaled that the Federal Reserve will communicate policy through actions, not words. Markets will have to infer the rest.

“Warsh’s instincts seem to favor less disclosure from the Fed and less discussion of potential future policy,” Forbes senior contributor Simon Moore writes. With the Fed no longer offering guidance, a handful of market indicators are now the best hints investors have about what officials might do next. These numbers are also the data points that have moved most sharply since Warsh’s remarks last month in Jackson Hole, prompting traders to rethink the chances of a near-term interest rate hike.

The Market‑Implied Probability Of A September Rate Hike

Friday’s CPI report showed inflation rising 0.4% in August, with the annual rate holding at 3.4%. Gasoline drove more than a third of the monthly increase, and core inflation rose 0.3%. The key number right now is the fed funds futures market’s estimate of whether rates will increase this month. With no verbal cues from the Fed, that probability has become the de facto policy signal.

Fed funds futures lifted the probability of a 25‑basis‑point increase to 58%, up from 36%, according to Forbes contributor Bill Stone, who writes that “two‑year Treasury yields jumped after Fed Chair Kevin Warsh used his first Jackson Hole speech to signal a tougher stance on inflation.”

That kind of volatility is what a no‑guidance environment produces: Markets respond directly to the data and speeches, without Fed commentary to smooth things out. “A market moving roughly 30 percentage points in little more than a week is not expressing a settled view,” Forbes contributor Joel Shulman says.

The probability of a rate change will move with each inflation print, payrolls report and claims release.

The 2‑Year Treasury Is Now The Market’s Best Clue To The Fed

Short‑term Treasury yields have become the market’s real‑time read on Fed policy. Warsh’s comments pushed the two‑year yield higher, showing that investors........

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