Wash may still be a "broken record" tonight. How to respond to fiscal issues is key.

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Golden Finance reported that on July 1, Fed watchers expect that tonight's speech and tone from Walsh will be largely the same as his first press conference on June 17. During that press conference, Walsh emphasized the importance of price stability and significantly reduced the forward guidance previously used to hint at the direction of future interest rate policy. Additionally, investors expect Walsh to maintain his hawkish stance and continue to prioritize controlling inflation. James, chief international economist at ING, said Walsh's commitment to price stability has largely alleviated concerns about the politicization of the Fed. He expects Walsh to deliver similar remarks again. James added that Walsh will inevitably be asked about the impact of fiscal policy on inflationary pressures tonight. His answers could be interesting, especially since his remarks on June 17 pushed up market expectations for rate hikes. It is also unlikely that Walsh will comment much on the Supreme Court's recent ruling preventing Trump from removing Cook from the Fed. "It's hard to imagine any aggressive questions," James said. "Instead, everything will be well-organized, and other central bank governors are happy to help this newcomer."
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