Today marked Kevin Warsh’s 100th day as Federal Reserve chairman, and much of the media buzz surrounding his Jackson Hole speech focused predictably on the same question: What does it mean for the next move in interest rates?

Will the Fed cut, hold or perhaps signal that rates need to remain higher for longer? Those questions matter, but they miss the bigger story emerging from the Warsh Federal Reserve. Warsh is changing the relationship between the central bank and financial markets, and market participants may have to get used to doing more of their own homework.

That shift may ultimately prove more consequential than whether the Federal Open Market Committee moves the federal funds rate by 25 basis points at its next meeting. Warsh appears to believe that the Federal Reserve should clearly explain its objectives and the economic principles guiding its decisions, but it should not provide investors with a detailed roadmap of future interest rates. The Fed should conduct monetary policy. Markets should study the evidence and determine prices.

Wall Street’s Fed Dependence Has Gone Too Far

For years, Fed watchers have parsed speeches, press conferences, dot plots and carefully chosen adjectives in an effort to determine where interest rates will be three, six or 12 months from now. Under Ben Bernanke, Janet Yellen and Jerome Powell, forward guidance became an increasingly important part of monetary policy. The result was a generation of market participants accustomed to having the central bank help tell them not only today's short-term interest rate but where policymakers believed rates were heading.

Warsh appears uncomfortable with that arrangement. His approach puts more responsibility back where it belongs: on investors, analysts and portfolio managers. Rather than wait for the Fed chairman to tell them what bonds should yield, they need to study inflation, employment, productivity, credit conditions, Treasury issuance, fiscal........

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