Kevin Warsh delivered his first FOMC meeting speech, releasing 7 major signals to the market:

1. Inflation must return to 2%, with no room for compromise!
This is a hawkish stance, willing to pay any price to reach 2% (even through rate hikes)!
2. The Federal Reserve will no longer pre-announce market moves
Remove forward guidance and dot plots for rate expectations, no more guessing whether rates will rise or fall
3. Rates may be higher and last longer than the market expects
Hawkish signals, current rates maintained at 3.5%-3.75%, no rate cuts expected in 2026, 9 officials expect at least one rate hike this year!
4. AI will become the biggest engine of U.S. economic growth
AI will structurally reduce costs and bring non-inflationary growth
5. There is no recession crisis in the U.S.
• GDP continues to grow
• Business investment remains strong
• Productivity improves
• The job market is stable
6. New officials launching major reforms!
Establishing 5 special working groups at once:
① Federal Reserve communication mechanisms
② Balance sheet
③ Data systems
④ AI and employment
⑤ Inflation framework
Prepare to learn from Musk, reaffirm all processes, and bring the Federal Reserve back to first principles!
7. The Federal Reserve returns to its traditional central bank role, letting the market set prices
Market volatility may increase in the future!