The death of Alan Greenspan at 100 and the simultaneous move by new Federal Reserve Chair Kevin Warsh to scale back forward guidance and the “dot plot” mark a deliberate pivot toward the deliberate ambiguity that characterised Greenspan’s 19-year tenure. Treasury Secretary Scott Bessent publicly endorsed the reduction in guidance and said the dot plot should be abandoned, while urging policymakers to keep an open mind on the inflationary effects of energy-price rises from the US-Iran conflict and on AI-driven productivity gains. The immediate effect is a communications vacuum: investors now have as little visibility on the policy path as at any point since Greenspan stepped down, reflected in a 150-basis-point divergence between Bank of America’s call for three rate hikes this year and Citigroup’s forecast of three cuts.

Warsh has announced five working groups—on communication strategy, balance-sheet policy, data sources, productivity, and the inflation framework—with findings due by year-end. He argues that forward guidance creates false certainty when the central bank cannot reliably forecast the economy. The shift occurs under acute fiscal and political pressure. The Treasury’s increasing reliance on short-term debt makes federal finances more sensitive to the short end of the yield curve that the Fed directly controls. With US debt at 100 percent of GDP and annual deficits at 6 percent, interest costs already exceed Pentagon spending, a reality that amplifies President Trump’s past demands for looser monetary policy.

Viewed from Washington, Bessent’s endorsement aligns the administration with a less predictable Fed. German financial observers note that Warsh’s scepticism is understandable, but warn that abandoning forward guidance could be perceived as concealing an inability to produce reliable forecasts. Russian commentary on Greenspan’s legacy highlights his own 2008 admission that his faith in market self-regulation was flawed—a reminder that opacity did not prevent the housing bubble and subsequent crisis. The current inflation backdrop, above the 2 percent target for five years and approaching 4 percent, makes the communication retreat particularly consequential.

The working groups’ conclusions, expected by the end of the year, will determine whether the Fed formalises a retreat from the transparency regime built under Bernanke, Yellen, and Powell. Until then, market participants must decipher economic data without the accustomed verbal signals, a trial-and-error process that is likely to sustain elevated volatility.