Golden Ten Compilation: Rumors of Walsh taking over stir the market, endorsing the independence of the Federal Reserve, but the path of interest rate cuts may tend to tighten?

Market reaction to 'Walsh may be nominated' 1 Mizuho Securities: If Walsh is elected, the market will feel sustained pressure to cut interest rates. The market has misjudged the speed of interest rate cuts, and it is expected that the Fed's rate cuts will be slower than expected or hoped by the market. 2. Wilson Asset Management: Walsh's tendency to cut interest rates under the condition of shrinking balance sheets may trigger market panic about liquidity contraction, leading to the sale of hedge assets such as gold, cryptocurrencies, and bonds. 3. National Australia Bank: Walsh's election will strengthen the expectation that the independence of the Federal Reserve will be protected, indicating that the Federal Reserve will not become a vassal of Trump or any other presidential will, and will not be arbitrarily influenced by him. 4. TD Securities: If Walsh is successfully elected as the next chairman of the Federal Reserve, the yield curve of US bonds is expected to steepen. But any market reaction will be short-lived, as the new chairman needs to persuade other members of the committee. 5. Commonwealth Bank of Australia: The market is familiar with Walsh, which will help stabilize emotions to some extent. He is more like a 'steady and reliable trader', rather than the type of bold and decisive person who starts over from scratch. 6. Carson Group: Walsh has always been a hawkish figure, and if he enters the Federal Reserve with the idea of a significant interest rate cut, he may not have much credibility within the Fed. We may even face a severely divided Federal Reserve that does not cut interest rates at all. 7. L&G Asset Management Company: Whoever Trump nominates will be more dovish than Powell. Although the market has already digested the expectation of future Fed interest rate cuts and a weakening of the US dollar in advance, long-term interest rates may rise due to the risk premium, raising concerns about the reversal of the situation of "buying rumors and selling facts". Latest institutional interest rate cut expectation 1. Mitsubishi UFJ: lowered its forecast for the number of interest rate cuts by the Federal Reserve this year, and expects the first interest rate cut to be in April. 2. China International Capital Corporation (CICC): The Federal Reserve is still expected to cut interest rates twice in 2026, but the first rate cut may be postponed until the second quarter. 3. Goldman Sachs Group: Preliminary estimates suggest that the Federal Reserve will conduct its next 25 basis point rate cut in June, followed by the final rate cut of this cycle in September. 4. Danske Bank: believes that the risk of policy easing again is increasing after the Federal Reserve's January interest rate decision is announced, and it is expected to implement interest rate cuts at the March and June meetings. 5. Deutsche Bank: Given that the economy and labor market currently appear more favorable, the Federal Reserve will not rush to cut interest rates. It is expected that the Federal Reserve may not cut interest rates again before Powell's presidency ends. 6. Huatai Securities: The January meeting of the Federal Reserve confirmed our more optimistic assessment of the US economy and job market, maintaining our expectation of a temporary suspension of interest rate cuts from January to May. The new chairman will cut interest rates 1-2 times after taking office in the middle of the year. 7. CITIC Securities: Powell expects the peak of tariff inflation to move from the first quarter to mid year, and it is uncertain whether there will be new tariff policies. It is expected that the Federal Reserve will not cut interest rates in the remaining two meetings chaired by Powell. 8. Nordic Bank: Although Powell maintains his expectation of interest rate cuts, he emphasizes the need to wait for the inflationary effects of tariffs to dissipate unless the job market significantly deteriorates, which poses an upward risk to our forecast of three interest rate cuts within the year (the first in March).