It remains an open question how transparent and forward-looking the Federal Reserve will be during Kevin Warsh’s tenure as central bank chairman.

Warsh, who was officially sworn in as the top Fed official on May 22, has made no secret of his disdain for forward guidance. He declined to submit a projection to the Fed’s quarterly “dot plot” forecast in June, and the first official policy statement under his watch was notably slimmed down.

“That statement just gives you the facts, as best we can judge it,” Warsh told reporters following the June policy meeting. “Absent also is so-called forward guidance, which we agreed was not well suited to the current policy conjuncture.”

The new Fed chair also announced the establishment of a task force to examine “possible improvements in the form and function of Fed communications.”

Fed Governor Christopher Waller, speaking at a Bank of Italy event Monday, offered a nuanced take on the benefits and pitfalls of forward-looking economic projections.

“I continue to believe that forward guidance can be a valuable tool that has, at times, significantly strengthened policymaking and will continue to be useful,” Waller said, according to prepared remarks. “But forward guidance is more art than science, and there have been times when it has hindered, rather than helped, policymaking.”

On the plus side, Waller recalled how in September 2021 the Federal Open Market Committee (FOMC) telegraphed that it would likely tighten monetary policy in the coming months.

“Even though we did not change the policy rate until March 2022, from September 2021 through mid-February, the two-year Treasury yield rose nearly 200 basis points,” Waller said. “That rise effectively shaved off about six months from the usual 12- to 24-month lag that one might conjecture would be needed to see the 200 basis points of actual tightening affect the economy.”

On the cautionary side, Waller expressed regret about forward guidance the FOMC adopted in September 2020, when it suggested it would be appropriate to hold rates steady between 0% and 0.25% until the COVID-era labor market reached levels “consistent with the committee’s assessments of maximum employment” and inflation showed it was on track to “moderately exceed 2% for some time.”

“In the end, this restrictive guidance tied the hands of the FOMC in 2021 and unnecessarily delayed rate increases,” Waller said, adding that the public was left dangling, wondering what “for some time” meant.

In March, following the Fed’s first policy meeting since the Iran war began, then-Chair Jerome Powell admitted that the uncertain inflationary impacts of the war-induced global energy shock meant an unusual amount of guesswork went into the FOMC’s quarterly Summary of Economic Projections.

“This is one of those SEPs where a number of people mentioned, if we were ever going to skip an SEP, this would be a good one,” Powell said.

Chances are, had Warsh already been at the helm in March, he would have pushed to forgo the SEP altogether. And based on Waller’s comments on Monday, there’s a good chance he would have gone along with that course of action.

“The takeaway is that forward guidance can help speed up policy transmission, but if it is not flexible enough, it can hinder policy transmission,” Waller said in his concluding remarks. “And, in some cases, it’s best not to use it at all.”