Mars Finance News, July 1 - Federal Reserve Chair Kevin Warsh will attend the European Central Bank's "Global Central Bank Forum" policy panel discussion at 21:30 Beijing time on Wednesday, and will deliver speeches alongside ECB President Lagarde, Bank of England Governor Bailey, and Bank of Canada Governor Macklem. This will be Warsh's first public appearance since chairing his first FOMC meeting last month, and the market is seeking clues to policy direction from his remarks. The market is watching whether Warsh will signal his judgment on inflation, his communication style, and whether he will maintain a hawkish stance. However, if the outside world expects him to provide a clear path for interest rates, it may be disappointed. Warsh has previously expressed reservations about forward guidance tools, believing they offer limited help in policy execution and preferring to reduce communication. IMF Chief Economist Pierre-Olivier Gourinchas said that strong forward guidance could lock a central bank into a future action, limiting policy flexibility. Evercore ISI Head of Central Bank Strategy and Economics Krishna Guha said the market will focus on how Warsh breaks down the components of inflation, including factors such as falling oil prices, changes in inflation expectations, commodity trends, dollar appreciation, and the cost spillover effects from AI. The current core PCE price index in the U.S. rose to 3.4% in May, the highest since October 2023. Investors expect Warsh may reiterate the Fed's commitment to price stability. Warsh's hawkish stance at the previous Fed press conference has already affected the bond market, with the 2-year U.S. Treasury yield rising and the 10-year yield falling from around 4.5% to about 4.3%. The market is currently pricing in about an 80% probability of a rate hike in September. Guha said if Warsh believes that a rate hike is needed to build policy credibility, taking action in both July and September could help complete adjustments before the midterm elections; but more likely, Warsh is still assessing whether it is necessary to strengthen credibility through a rate hike, so the July meeting may not bring immediate action.

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Wash will make his debut at the Global Central Bank Forum today, and the market is focusing on his statements on inflation and interest rates.

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