The new official took office with three fires, and the new chairman of the Federal Reserve, Kevin Walsh, launched a comprehensive operational review and established five special working groups internally, with a direct conclusion by the end of the year. These five groups are aligned with: Federal Reserve communication, balance sheet, data sources, productivity and employment (with a focus on AI impact), and inflation framework. There are three most vicious blades facing inward behind this wave of restructuring: The communication mechanism has changed: In the past, the Federal Reserve used to calm the market every day and send a dot matrix chart to the path. Walsh wants to 'reduce commitments', and in the future, the Federal Reserve will only look at targets and facts, and the market will guess the path. The FOMC meeting will once again become a true source of intense volatility. Balance sheet inversion: In the past, when the market fell, the Federal Reserve would expand its balance sheet and release water. Now Walsh wants to normalize the reduction of balance sheets and no longer help the private sector absorb long-term risks. The underlying anchors of long-term interest rates, stock valuations, and credit spreads all need to be repriced. AI officially becomes a monetary policy variable: The Federal Reserve directly lists productivity in the AI era as a core research topic. If AI cannot be monetized for a long time, coupled with high valuations, high financing costs, and high depreciation, the Federal Reserve may not step forward to provide a fallback. In the past, people were accustomed to the saying 'when the economy was poor, the Fed would expand its balance sheet;'; The liquidity paradigm of 'when the long end rushes, the Fed presses down'. But according to the latest data from CBO, the US deficit for fiscal year 2026 has soared to $1.9 trillion, with debt accounting for 101% of GDP. Against the backdrop of the financial helicopter frantically throwing money, the central bank has chosen to step back and exercise restraint.