The Federal Reserve's latest interest rate meeting has concluded. Although the rate decision aligned with market expectations, Wall Street's reaction was unexpectedly severe. Wash, the new chair nominated by Trump, did not release the easing signals the market had anticipated during his first appearance. Instead, a series of hawkish comments led investors to reassess the policy direction. Following the announcement, the US stock market tumbled. The S&P 500 index fell by more than 1% in a single day, marking the worst performance on the day of a new Fed chair's first meeting since 1994. The Dow Jones Industrial Average retreated significantly from its intraday historical high, ultimately closing down over 500 points as market sentiment instantly turned cautious.

The focal point of this meeting was not the decision to keep interest rates unchanged in the 3.50% to 3.75% range, but rather Wash's policy statements following the meeting. During the press conference, he repeatedly emphasized the importance of price stability, explicitly stating his commitment to bringing the inflation rate back to the 2% target level. He noted that the committee's commitment to achieving this goal is firm and unambiguous, a clear signal rarely heard over the past five years. Meanwhile, he confirmed that no personal interest rate projections were submitted and pushed for a significant simplification of the policy statement. These moves are widely seen as important signals reshaping the Fed's policy framework, indicating that the new leadership is in no hurry to shift towards easing policies.

Market veterans interpret this as Wash demonstrating a stance that clearly exceeded prior market expectations. Prominent investor Gundlach pointed out that this means monetary policy will not be as loose as in the first quarter of this year, when many investors were betting on rate cuts, but the current signals point in the sharply opposite direction. This stance actually reduces the risk of the Fed adopting overly loose policies in the future, providing sufficient justification for holding long-term US Treasuries. If Wash truly delivers on the commitment to price stability, long-term inflation expectations will be suppressed, thereby benefiting the bond market.

For Wall Street, the key signal released by this meeting is that the new chair's priority upon taking office is not cutting rates, but rebuilding market confidence in the Fed's ability to control inflation. Wash has staked his policy credibility on inflation control; if he fails to achieve price stability, his credibility will be directly challenged. Therefore, the market does not need to worry excessively about aggressive rate cuts by the Fed in the future, because once inflation is stimulated to rebound, the policy credibility emphasized by the new leadership will face enormous pressure. This shift in policy orientation may become a key variable affecting future market trends.