Market attention will converge on the Federal Reserve this week, with the new Chair's first post-meeting press conference taking center stage. Although past stances leaned towards rate hikes, during the campaign period, he promised to drive institutional reform and guide interest rates lower, aligning with the administration's policy preferences. Now, the economics community is closely watching whether these reform promises will be fulfilled, including the format and style of the press conference itself. Some market analysts view this press conference as a must-watch television event, while others point out that there may be surprises in how policy is articulated, maintaining an open attitude towards the explanation of policy.

Reform promises cover communication mechanisms and the size of the balance sheet, with outsiders waiting to observe the implementation of priorities. In the early stage of taking office, the press conference is seen as a key area for exerting influence, as this falls within the Chair's exclusive domain. Duration, tone firmness, and responses to inflation issues will all undergo dual scrutiny from Washington and the market. The direction of interest rate policy is also full of uncertainty. With inflationary pressure continuing, voices supporting rate hikes among senior officials are increasing, a significant shift compared to the earlier situation where no one supported it.

This leaves policymakers in a dilemma. Campaign promises and White House guidance lean towards rate cuts, but rising prices narrow the operational space. Another key observation point lies in future economic projections, with even speculation that the new Chair may no longer participate in dot plot forecasts. If the existing median forecast is maintained, it will provide buffer space for policy, emphasizing policy stability while retaining room to react to inflation changes.

Regarding the subsequent path, there is divergence in the market. Some viewpoints believe inflation risks may be downplayed, emphasizing the push of technological improvements on productivity, thereby paving the way for rate cuts. There are also views believing he may adjust his stance to support rate hikes. Another analysis proposes that balance sheet reduction could become an alternative tool to rate hikes, suppressing inflation without adjusting interest rates. Currently, the general expectation is that the June meeting will maintain unchanged interest rates. Regarding the pace of reform, most opinions lean towards gradual adjustment rather than a radical overhaul. It is expected that this meeting will see a comprehensive assessment of the monetary policy framework, and out of consideration for giving adaptation space, the possibility of dissenting votes internally is low; officials are more inclined to wait and see the subsequent trend of inflation.