Let's talk about today's interest rate decision and Walsh's debut: 1. Just staring at the dot matrix and saying that the eagle is problematic, "Walsh said," Note that all submissions are written with pencils, those with large erasers. "This means that there is a high probability that these dot matrix predictions will be corrected, and FOMC members will also adjust their judgments based on geopolitical, oil price, and inflation trends. Instead of focusing on the dot matrix, it is better to keep an eye on oil prices, as the main driving factor for inflation rebound since March has been oil prices; Why did 9 voting committees predict that interest rates would continue to rise within the year? It is probably because they used previous trends and data to make predictions. After all, the US Iran memorandum has just been signed, geopolitical tensions have just begun to ease, and they are uncertain about the future trend. Then let's first judge based on the previous factors and make adjustments later The interest rate observation on CME changes rapidly, and the dot matrix on FOMC also changes rapidly. 2. The Federal Reserve's interest rate decision statement did not mention the employment mission. It is obvious that for the Federal Reserve, the current priority is indeed inflation. In fact, for the Federal Reserve, inflation and employment are like a seesaw. During this period, employment has been good and inflation has rebounded, so the priority of inflation is very high. If employment is not feasible in the future, then the priority of employment will also be raised. The FOMC balances inflation and employment, and whoever is worse has greater power. It should be noted that a large part of the privacy of the non farm strong in May is due to the "World Cup effect". Did Space talk about this on Tuesday? Https://(x.com)/qinbufark/status/2067519756882833815? s=46&t=k6rimWsEbo2D2tXolYcM-A 3. Due to the low word count of the interest rate resolution statement, emphasis on inflation priority, Walsh's failure to submit his own dot matrix forecast, and limited information released at the press conference, I believe Eagle is reasonable based on these points. After all, in the past eight years, the market has become accustomed to the forward expectations management of the Powell era (Fed governors and local Fed chairs spoke out three times more frequently during the Powell era than during the Yellen era), and now suddenly reducing communication is naturally chaotic for the market, which needs to find a new anchoring framework. When the conventions that you have been accustomed to for the past eight years are broken, you will naturally feel lost and strongly uncomfortable. 4. The pricing of long-term assets is determined by the slow movement of the system in the coming years, and the direction of this system lies in the conclusions proposed by the five special working groups established by Walsh at the end of the year. These five special working groups focus on: Federal Reserve communication, balance sheet, data source usage, productivity and employment (impact of AI), and inflation framework. He was given an important task to study whether the effects of monetary policy come from interest rate tools or balance sheet tools. In other words, which plays a greater role, the price of currency (interest rate) or the quantity of currency (balance sheet expansion/contraction, QE/QT). If you look at the focus of the five working groups, you can understand that they actually intend to reconstruct a complete framework system for the analysis, judgment, decision-making, and external communication of the Federal Reserve: the inflation framework (regarding the setting of inflation targets), communication methods, which data should be used as a benchmark for judgment, the impact of AI on productivity and employment, and even the identification and judgment of risks and crises to define the boundaries of the Federal Reserve's actions (triggering conditions for Fed put) It's hard for us to say what this will become now? But at least for now, his rhythm is still organized: 1) Reducing communication is not about immediately not communicating; 2) Institutional reform is a six-month research process, and we will wait until we receive the research conclusions before examining the methods and pace of implementation. Think about the immigration enforcement of D.O.G.E (Department of Government Efficiency) and ICE at the beginning of the 25th year, both had good intentions, but lacked rhythm and regulations, and implemented them aggressively from the beginning, resulting in widespread complaints and backlash. The core of cooking small delicacies is not to pay attention to the heat, rhythm is more important than speed. The stability of fire, rhythm, and direction are the three most important factors.