Jerome Powell's Fed Debut Looms: From Critic to Chair, Market Wagers on Policy Shift Toward Hawkish Stance

BlockBeats News, June 15th, Federal Reserve's new Chair, Kevin Warsh, will hold his first interest rate decision press conference this Thursday, which is seen by the market as a key window to assess the Fed's future policy direction.

Prior to taking office, Warsh was known for his critical views, having questioned the Fed's communication strategy and forward guidance framework multiple times, and advocated for balance sheet reduction. Now, facing real policy challenges, he will respond for the first time as a decision-maker to high inflation and a complex geopolitical environment.

Current U.S. inflation remains above 3%, still below the 2% target, while a strong labor market and oil price volatility have contributed to inflation resilience surpassing expectations. The market generally expects the Fed to keep the benchmark interest rate unchanged in the 3.50%-3.75% range at this meeting.

Investors are more interested in Warsh's description of the policy framework and inflation trajectory, and whether he will adjust the Fed's long-standing communication approach, including his stance on "forward guidance" and the "dot plot."

This meeting will also release the latest quarterly Economic Projections (SEP). Analysts believe that any changes in rhetoric regarding upward inflation or policy tightening could significantly impact the market's repricing of the probability of rate hikes later this year.

The market generally believes that this press conference will be a critical starting point in defining the "Warsh Era" monetary policy style, and his statements may become a key variable in global asset pricing in the future.