At the early morning of June 18 Beijing time, the new Federal Reserve Chair Kevin Warsh made his debut. Although interest rates remained unchanged at 3.50%-3.75%, the policy shift behind the scenes was truly shocking!

1. Statement “massive slimming” + removal of forward guidance: The policy statement shrank from 345 words to 132 words, completely removing the wording of “accommodative stance.” Warsh explicitly stated that “forward guidance is no longer applicable,” ending the era of the “transparent Fed” under Powell, and ushering in a “fuzzy Fed”!
2. Dot plot “missing a corner”: 18 officials submitted forecasts, but only Warsh himself refused to submit a dot plot! He has long criticized this mechanism for rigidifying policy, and this move directly breaks a 14-year tradition, hinting that the Fed may gradually abandon the dot plot in the future.
3. Hawkish signals emerge: The dot plot shows that 9 officials expect at least one rate hike this year, with only 1 expecting a cut. However, Warsh “made up for it” at the press conference, saying that no one wants to hike rates in the short term, and opinions within the committee are divided.
Warsh is freeing the Fed from the “constraints of forward guidance,” shifting toward complete data dependence. Future market volatility is likely to rise significantly, and every economic data point will be crucial!
#美联储 #Warsh #FOMC #US stocks #Macroeconomics