When the Federal Reserve wraps up its policy meeting Wednesday, one important thing could be missing — a dot.

The central bank’s Federal Open Market Committee is set to release its quarterly update of where individual officials expect interest rates to head this year and through 2028 and beyond. Markets closely parse the grid, known more commonly as the “dot plot,” for information on how Fed officials view the economy and its impact on monetary policy.

However, most Fed-watchers on Wall Street expect new Chair Kevin Warsh won’t participate, either because he feels he’s not ready after having only been in office since May 22 — or simply because he doesn’t like the dot plot and its implications for “forward guidance.”

Declining to submit a dot would counter some 14 years of post-financial crisis practice for the Fed, and risk alienating other FOMC officials who favor the way it helps them communicate with the public. However, it also could be an effective first step for a central bank leader who has vowed fundamental changes for how the institution operates.

“It seems to me fairly likely that he doesn’t want to submit a rate forecast,” said Bill English, former head of monetary affairs at the Fed and now a professor at Yale. “There may be others on the committee who don’t particularly like the dot plot, who might be willing to do that, too.”

Incoming Federal Reserve Chair Kevin Warsh’s talk about “regime change” at the central bank has generated speculation about everything from interest rates to major personnel changes to fundamental alterations in the way it operates and communicates.

But what that eventually might look like is subtler though perhaps more consequential – a rethink of how the Fed manages the financial plumbing in the U.S. economy and the mammoth balance sheet it has built through some 18 years of crisis fighting.

Interviews with former Fed officials and economists, along with a growing library of research, suggest Warsh could guide the Fed to a smaller role in day-to-day financial markets, while also setting clearer rules for how and when it should intervene.

Simply stated, the debate centers on whether the Fed should continue using its balance sheet as a regular tool for influencing financial conditions and supporting markets — as it has through much of the post-financial crisis era — or reserve it for periods of market dysfunction and more pernicious economic stress.

The debate over the $6.8 trillion balance sheet is technical in nature and tucked away from the more common discussions about Fed policy. But the stakes are substantial.

Since the financial crisis that exploded in 2008, the Fed has aggressively used its holdings of Treasurys and mortgage-backed securities to stabilize markets and influence broader financial conditions.

Prior to the crisis, the Fed had a minuscule balance sheet relatively speaking – about $800 billion – but expanded it at one point to about $9 trillion. The Fed’s asset holdings now equate to about 23% of the U.S. economy, or some seven times where they were pre-financial crisis.

Any effort to change the system could have wide ramifications, potentially impacting Treasury yields, mortgage rates and other interest-sensitive areas of the economy, while influencing the way policymakers respond to future crises.

“It’s a debate we’re going to be seeing later this year. But one thing that’s encouraging about all of this is that nobody, including Kevin Warsh, is arguing that any of this could be done rapidly,” said Lou Crandall, chief economist at Wrightson ICAP and a longtime Fed watcher.

“It’s got to be done carefully, and some of the changes … would probably take time to implement,” he added. “Everyone’s looking at this as a medium-term project rather than part of the day-one agenda.”

Warsh called the balance sheet, in a Wall Steet Journal op-ed piece last year, “bloated” and said it could be reduced while at the same time allowing the Fed to lower interest rates.

“I think shrinking the balance sheet is the wrong objective, and many of the proposals to meet this objective would undermine bank resilience, impede money market functioning, and, ultimately, threaten financial stability,” Fed Governor Michael Barr said in a speech last week. “Some would actually increase the Fed’s footprint in financial markets.”

Barr’s thesis essentially is that looking merely at the size of the balance sheet is too narrow – that other issues, such as how it is comprised with respect to duration and composition also matter. Neglecting those issues, he asserts, could have “perverse” consequences such as increased volatility and even the possibility of more interventions from the Fed. At the same time, he said, lowering reserve requirements for banks could destabilize the system.

In addition, he has spoken in favor of efforts that Michelle Bowman, the Fed’s vice chair for bank supervision, has undertaken to ease some banking regulations. Part of that would alter what kinds of assets banks could claim as reserves and use in times of crisis, an effort that Dallas Fed President Lorie Logan cited in a recent speech, saying she looks forward “to seeing how that work progresses.”

Logan has firsthand experience with the dynamics that go into balance sheet management. Prior to her current position, she ran the trading desk at the New York Fed, which is charged with executing the central bank’s open market strategy.

Logan also noted, in the speech delivered April 2, that the Fed has other tools at its disposal to help the flow of liquidity — essentially using components from both the Warsh and Barr sides of the argument.

Like others, she spoke in favor of moving slowly to address the issue.

“I’d emphasize that any changes in the balance sheet should be gradual and planned carefully,” Logan said.

Central bank researchers have released several papers on the issue, including one titled “A User’s Guide to Reducing the Federal Reserve’s Balance Sheet.”

The paper concluded, without an endorsement in either direction, that up to $2.1 trillion in reductions could be achieved through the current policy framework, with further cuts possible should the Fed change direction into a scarce reserves approach to banking. The paper also contends it would take “at least a year and quite possibly several” before the process could even begin.

All of these proposals are likely to be on the table after Warsh takes over Friday.

He inherits a Fed facing not only economic challenges but also high political expectations from a president who regularly attacked outgoing Chair Jerome Powell, nicknaming him “Too Late” as he repeatedly threatened to fire him for not carrying out Trump’s desire for lower rates.

For all the discussion about “regime change,” former officials caution against expecting a dramatic overnight overhaul, with Warsh’s lofty goals about to meet central bank reality.

Warsh will inherit a Federal Open Market Committee built on consensus, where even major policy shifts typically move deliberately and only after lengthy internal debate. Political considerations, these officials say, are left outside the central bank’s walls.

“I was going to FOMC meetings when [Alan] Greenspan was chair, so that’s a long time. Politics never enters that room,” said Mester, the former Cleveland Fed president. “Political considerations never enter the discussion.”

Kevin Warsh was confirmed Wednesday as the next Federal Reserve chair, taking over the central bank at a time when President Donald Trump is pushing for lower interest rates even as fresh inflation data complicates the case for cuts.

In the most divisive vote ever for a Fed chair, Warsh, 56, won confirmation to take over for Jerome Powell, who has served in the top leadership position since 2018 and whose term will expire Friday.

The Senate voted 54-45 to confirm Warsh, ending a monthslong saga that began in the summer of 2025 and included an extensive search for Powell’s successor. The vote was almost completely along party lines, with only Pennsylvania Democrat Sen. John Fetterman crossing over to vote for Warsh, who becomes the 11th Fed chair of the modern banking era.

Powell will stay on at the Fed as he has two years left in his term as governor. He said last month that he will remain at least until an investigation into renovations at the Fed’s headquarters is complete. The last time a Fed chair returned to the board was nearly 80 years ago.

Trump has made no secret that he expects Warsh to lower rates after having lashed out repeatedly at Powell for monetary policy the president has felt was too restrictive. Warsh was part of a derby that included nearly a dozen candidates at one point, including current Governors Christopher Waller and Michelle Bowman.

“The Senate’s confirmation of Kevin Warsh as the next Chairman of the Federal Reserve is a welcome step towards finally restoring accountability, competence, and confidence in Fed decision-making,” said White House spokesman Kush Desai.

The confirmation comes, however, following separate reports this week showing inflation well above the Fed’s 2% target and pipeline pressures accelerating at their highest levels in more than three years. Markets have been scaling back expectations for rate cuts and are even pricing in a chance of an increase later this year.

Rep. French Hill, R-Ark., praised the Fed’s decision and Warsh’s inflation-fighting credentials.

“Chairman Warsh has repeatedly emphasized the importance of placing affordability and price stability at the center of our economic agenda,” Hill said in a statement. “His commitment to disciplined monetary policy will help restore confidence in our economy and support long-term prosperity.”

Warsh could not be reached for comment.

This will be Warsh’s second stint at the Fed.

During his first run, he served from 2006-11, a time during which Fed officials initially dismissed dangers from the subprime mortgage meltdown that led to the global financial crisis, then implemented a historic set of policies aimed at rescuing the economy. Part of those rescue endeavors included an unprecedented expansion of asset purchases that sent the Fed’s balance sheet past $4 trillion, a program known as quantitative easing that Warsh argued then had gone too far.

Since leaving the Fed, Warsh has been a consistent critic of monetary policy and last year, in a CNBC interview, called for “regime change” at the central bank. During the period, he’s been a lecturer at the Stanford School of Business and has served on various boards of directors.

Warsh takes the place of Stephen Miran on the Fed board, who was appointed to governor in September 2025 to fill the few months left on the unexpired term of Adriana Kugler, who resigned unexpectedly in August.

Miran has dissented from each of the Federal Open Market Committee’s votes since taking the seat. When the committee voted to cut by a quarter percentage point at each of last three meetings in 2025, Miran voiced support for a larger half-point cut. This year, he’s opposed votes to keep the federal funds rate steady, arguing for quarter-point reductions.

Warsh’s first meeting as chair of the FOMC is scheduled for June 16-17.

He also will be the wealthiest Fed chair ever, with holdings well north of $100 million. As Fed chair, he’ll have to divest himself of many of his investments under a strict new policy implemented since disclosures of questionable trading practices among top officials.

Correction: Rep. French Hill is from Arkansas. An earlier version misstated the state.

In what could be Jerome Powell’s final meeting as Federal Reserve chair, he is expected to lead his fellow policymakers toward another cautious pause, with stubborn inflation and a resilient labor market leaving little room yet for interest rate cuts.

The decision Wednesday will come against a backdrop of elevated energy prices and a central bank that has been above its 2% inflation target for five years at the same time that the labor market has been weak but not in distress. That’s not a recipe for easing, at least not yet.

“On the dual mandate, they’d say we’re roughly at a stable labor market,” Roger Ferguson, an economist and former vice chair at the Fed, told CNBC. “On the inflation side of the mandate, [there’s] a lot more work to be done with a sticky 3% [inflation rate], and I hope they argue, ‘we’re going to sit tight for a little while to see how this all plays out.'”

Similarly, Goldman Sachs economist David Mericle expects the post-meeting statement “is likely to acknowledge the better labor market news and higher inflation numbers but to leave the standing policy guidance unchanged. We expect a strong consensus to stay on hold for now, with only one dissent, as in March.”

So with little drama over the rate decision — markets are pricing in a 100% chance of the FOMC staying on hold — attention will turn squarely to Powell.

Unless something unexpected pops up, the chair’s designated successor, Kevin Warsh, appears on track to take over when Powell’s term ends in May.

The transition clouds the usual signaling value of Powell’s post-meeting news conference.

Crude oil prices are hovering around $100 a barrel and the average price nationwide for gasoline is surging again, now around $4.18 a gallon, further complicating the Fed’s path.

Though Fed officials often would look through such spikes as temporary, they also remain cautious about longer-term impacts should the fighting in the Middle East escalate.

“Inflation has continued to come in far above anyone’s expectations and far above the Fed’s target,” Tempelman said. “Everyone expects this to be Jay Powell’s final meeting. I think also there’s very little uncertainty as to what the decision will be, namely, that there will be no change to monetary policy in this meeting, and that from the June meeting on, it will be the Fed … chaired by Kevin Warsh.”