Institutional Outlook on Powell's Debut: Policy Stance Yet to Be Clarified, Risks on Both Hawkish and Dovish Sides

BlockBeats News, June 17th, Kevin Wash will preside over the FOMC meeting for the first time as Fed Chair tonight. The market does not have much suspense about the interest rate itself, but there is still considerable uncertainty about his policy stance and decision-making basis. Institutional perspectives on this event are summarized as follows:

UBS: There is still not enough certainty about Wash's policy stance, and his monetary policy response is also uncertain. Whether Wash is hawkish or dovish, both may bring market pricing risks.

ANZ Bank: Wash has shown a strong willingness to reform, and it is expected that the press conference will reveal his reform ideas, with more detailed details possibly to be elaborated in the opening speech at the August Jackson Hole Symposium.

Bank of America: It is expected that Wash will be dovish in the press conference. We believe he will say that the Iran conflict does not affect potential inflation (it only has a one-time impact on the price level), so the Fed should "ignore" it, especially after recent reports of a solution to the conflict.

Capitol Macro: Or he may be asked about his view on interest rates. The market's risk is that Wash's remarks may be more hawkish than expected—either due to communication errors or simply because his current position is not as dovish as when he sought President Trump's nomination.

Yale University: If Wash overly relies on "AI deflation theory" and other soft logic while ignoring hard data, the Fed may repeat the mistakes of the "inflation transitory theory".

Nordea Bank: It is expected that Wash will lean towards a more neutral or even slightly hawkish view to enhance his credibility. Any changes in his communication will be indicative rather than immediately implemented.

BNY Mellon: Wash has always been critical of forward guidance and may use this press conference (or limit the number of press conferences) to indicate how communication policy will change during his term.

MFS Investment Management: Considering Wash's views on technological productivity, he may make dovish comments. However, this possibility is low because making such comments at this time would damage his image as a hawk. (FXStreet)