Washington will make its debut appearance at the Global Central Bank Forum today, with the market paying close attention to its stance on inflation and interest rates.

BlockBeats News, July 1st, Federal Reserve Chair Kevin Warsh will attend the ECB's "Global Central Bank Forum" policy panel discussion at 9:30 p.m. Beijing time on Wednesday, and deliver joint remarks with ECB President Lagarde, Bank of England Governor Bailey, and Bank of Canada Governor Macklem. This will be Warsh's first public appearance since chairing last month's FOMC meeting, and the market is trying to find policy clues from his speech.

The market is watching whether Warsh will provide signals regarding inflation assessment, policy communication methods, and whether he will continue to convey a hawkish stance. However, if the market expects him to provide a clear interest rate path guidance, it may be difficult to achieve. Warsh has previously expressed reservations about forward guidance tools, believing they have limited effectiveness in policy implementation and preferring less communication. IMF Chief Economist Pierre-Olivier Gourinchas stated that strong forward guidance could potentially limit central banks to a future action, constraining policy flexibility.

Evercore ISI Head of Central Bank Strategy and Economics Krishna Guha stated that the market will focus on how Warsh will break down the factors contributing to inflation, including the decline in oil prices, changes in inflation expectations, trends in commodities, dollar appreciation, and cost spillover effects from AI. The current U.S. core PCE price index rose to 3.4% in May, the highest since October 2023, and investors expect Warsh to reiterate the Fed's commitment to price stability.

Warsh's previous hawkish remarks at the Fed's press conference have impacted the bond market, with the 2-year U.S. Treasury yield rising and the 10-year Treasury yield falling from about 4.5% to about 4.3%. The current market pricing probability for a rate hike in September is around 80%. Guha stated that if Warsh believes it is necessary to raise rates to build policy credibility, taking action in July and September would help to complete the adjustment before the midterm elections; however, it is more likely that Warsh is still evaluating whether a rate hike is necessary to strengthen credibility, so the July meeting may not result in immediate action.