Walsh will make his debut at the Global Central Bank Forum today, and the market is paying attention to his statements on inflation and interest rates BlockBeats News: On July 1st, Federal Reserve Chairman Kevin Warsh will attend the European Central Bank's "Global Central Bank Forum" policy group discussion at 9:30 pm Beijing time on Wednesday, and deliver speeches together with European Central Bank President Lagarde, Bank of England President Bailey, and Bank of Canada President Macklem. This will be Warsh's first public appearance since hosting his first FOMC meeting last month, and the market is trying to find policy clues from his speech. The market is paying attention to whether Warsh will release signals around inflation judgments, policy communication methods, and whether to continue its hawkish stance. However, if the outside world expects it to provide clear guidance on the path of interest rates, it may be difficult to achieve. Warsh has previously expressed reservations about forward thinking communication tools, believing that they have limited assistance in policy implementation and tend to reduce communication. Pierre Olivier Gourinchas, Chief Economist of the IMF, stated that strong forward guidance may lock the central bank in a future action, limiting policy flexibility. Krishna Guha, Head of Central Bank Strategy and Economics at Evercore ISI, stated that the market will focus on how Warsh breaks down inflation components, including factors such as falling oil prices, changes in inflation expectations, commodity trends, US dollar appreciation, and cost spillover effects brought about by AI. The current US core PCE price index rose to 3.4% in May, the highest since October 2023, and investors expect Warsh to reaffirm the Federal Reserve's commitment to achieving price stability. Warsh's hawkish statement at the Federal Reserve press conference earlier has affected the bond market, with 2-year Treasury yields rising and 10-year Treasury yields falling from around 4.5% to around 4.3%. The current market has a pricing probability of about 80% for a rate hike in September. Guha stated that if Warsh believes it is necessary to establish policy credibility through interest rate hikes, taking one action each in July and September would help to complete the adjustment before the midterm elections; But the more likely scenario is that Warsh is still evaluating whether it is necessary to strengthen its credibility through interest rate hikes, so the July meeting may not take immediate action. [Original link]