Preview of Walsh's Press Conference: Market Focus on Five Key Signals

On September 17, the five key points of focus for Federal Reserve Chairman Walsh's press conference include: First, policy communication, where the market is interested in whether Walsh can clearly explain the logic behind policy decisions. Analysts expect that if an interest rate hike occurs as scheduled this week, Walsh may frame it as a necessary measure to ensure inflation returns to target in a timely manner. Second, the inflation narrative, where the market will pay attention to how he assesses whether inflation pressures from energy and tariffs are temporary supply shocks or could evolve into more persistent pressures. Third, the independence of the Federal Reserve, where attention will be on how Walsh responds to Trump's calls for rate cuts and the backdrop of market expectations for rate hikes, as well as whether he emphasizes the FOMC's independent decision-making and "data dependence." Fourth, forward guidance, as Walsh has previously said little about the future path of interest rates, and his vague statements in July caused market confusion; the market will be watching to see if he adjusts his communication strategy this time. Fifth, risks in the bond market, as on September 14, the yield on the 10-year U.S. Treasury bond surpassed 5%. The market will be focused on whether Walsh addresses the risks of further selling in U.S. Treasuries and whether he expresses concerns about fiscal conditions and inflation risk premiums.

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