Next Wednesday, Powell will step onto the podium for the press conference, concluding the meeting with a decision holding no surprise—interest rates will remain unchanged. The market isn't truly waiting for that decision. On Friday, the U.S. Department of Justice dropped its criminal investigation into Powell. The primary political obstacle that had been used to block Trump's nominee, Kevin Warsh, was thus removed. Prediction market data from Kalshi that day: the probability of Warsh being officially confirmed before Powell's term expires on May 15 jumped from 30% to 84%. In other words, the April 29 press conference will most likely be the last time Powell stands at the podium as Fed Chair. Warsh intends to dismantle the foundation. On April 21, Warsh sat before the Senate Banking Committee and stated: "Too many Fed officials, both current and former, have expressed their views in advance about where they believe interest rates should be at the next meeting, next quarter, or next year." The implications of this statement reach much further than any single rate hike or cut decision. During the same hearing, he explicitly called for abolishing the "dot plot"—the chart published quarterly showing the interest rate projections of the 19 FOMC members. He criticized core PCE as a "rough estimate," labeled inflation "a choice," and characterized the high inflation of 2021-22 as a policy error rather than the result of external shocks. Regarding the regular press conferences after each FOMC meeting, he refused to commit to continuing them: "The pursuit of truth is more important than repetition." He also hinted at potentially reducing the number of meetings per year, without providing a specific figure. Forward guidance—the mechanism where the Fed informs the market in advance of its intentions—is a system established by Bernanke after 2008. From calendar-based commitments to conditional commitments, to the post-FOMC press conferences, the dot plot, and the minutely parsed statements, this framework has quietly become the hidden foundation of global asset pricing over the past 15 years. Warsh says he intends to dismantle this foundation. Powell has already begun stepping back. Those who read the transcripts of the January and March FOMC press conferences have likely noticed something. On January 28, Powell stated: "The Committee is not trying to articulate when or by what standard it will cut rates." Compared to his customary forward-looking statements in recent years, the tone of this remark was noticeably softer. By March 18, he went further—when pressed on whether forward guidance might change, he unusually stated publicly: "There is currently a lack of consensus within the Committee on how to change the communication approach." This is a sitting chairman saying: we have discussed this internally. Simply put, before his departure, Powell has already been actively loosening the binding force of forward guidance. It's not entirely forced by Warsh's agenda; it seems more like he is intentionally creating space for his successor. Two trajectories are strangely converging: one gradually phasing out in the final press conferences of the outgoing chair, the other already announcing what it intends to do upon taking over post-confirmation. The loss of anchor did not begin on the day Warsh takes office. This is not just a story for the bond market. Over the past 15 years, the assumption that "the Fed will tell you in advance what it's going to do" has been deeply internalized into the pricing models of almost every asset class. What the stock market will feel first is a tremor in valuations. High-P/E growth stocks can maintain their current multiples partly based on the premise that the future path of the discount rate is predictable—only when you know where rates are and where they are headed can the discounted cash flow model produce a credible number. If Warsh's framework is implemented, this premise disappears. When models start trembling, the valuation multiples of growth stocks are far more vulnerable than those of value stocks. This is not a directional interest rate shock, but a problem with the visibility of the discount rate itself; the latter's destructive power on valuations is more persistent. The watershed moment will be whether Warsh provides an alternative framework: if, upon taking office, he announces some form of "data-dependent, scenario-based guidance," the compression in growth stock valuations would be significantly less than under a scenario of complete silence. The vulnerability in the credit market is more subtle. Corporate bond refinancing decisions rely on "having a basic grasp of the interest rate path over the next three years." Once this visibility vanishes, credit spreads will need to compensate for an additional uncertainty premium—and current spreads are at extremely tight levels not seen in 25 years, leaving almost no buffer. The widening of spreads from here could happen quickly. There's only one condition for this not to materialize: if Warsh's "no forward guidance" is interpreted by the Senate and the market as merely a minor adjustment in communication style, rather than a systemic shift. In the foreign exchange market, the situation is even more nuanced. Many emerging market central banks have used the Fed's forward guidance as a policy reference frame over the past decade. If this reference frame suddenly becomes unreadable, calibrating domestic exchange rate policy becomes more difficult, and currency volatility naturally rises. During the 2013 "Taper Tantrum," emerging market currencies with weaker reserves fell 6%-15% within months. While the foreign exchange reserve situation in emerging markets has improved currently, global growth expectations are weaker (the IMF just downgraded 2026 global growth to 3.1%), meaning the growth premium this time is thinner. Currently, the MOVE index is around 67, below its historical average of 75-80. Implied volatility in the bond market is at historically low levels; the market is still enjoying the certainty premium provided by forward guidance for free. During the peak of the "Taper Tantrum," MOVE exceeded 125. Back then, the market panicked about "QE being tapered"—the direction was known, only the scale was changing. This time, the market faces the "communication framework itself disappearing," a source of uncertainty that is more fundamental. MOVE moving towards 75-80 would be a signal that the bond market is moving first; historical data shows that once it breaks above 90, volatility in equities and credit markets typically begins to follow. How to read the press conference day. If Warsh is confirmed by the Senate before May 15—current probability 84%—April 29 will be Powell's final media appearance as Chairman. With less than three weeks between now and May 15, if confirmation proceeds smoothly, the transition will be clean: Powell departs, Warsh takes position, no overlap. But during these three weeks, the market will not wait quietly. Warsh's statements at the hearing were clear enough; the market will reinterpret every word Powell says at the press conference through the lens of Warsh's agenda—not because both men are in charge simultaneously, but because the market is already pricing in the new framework. Powell will not comment on Warsh, will not explicitly defend forward guidance, and will not preemptively endorse his successor. He will say, as usual, "we make decisions meeting by meeting," emphasize "data dependence," and choose the least contentious path on the rate decision. At the start of the press conference, Treasury futures will likely move first—the market will watch whether his wording on inflation leans hawkish or dovish, as this will determine the initial policy conditions Warsh inherits. During the Q&A, reporters will almost certainly press him on "how he views forward guidance reform"; that answer will be worth parsing word for word. The more Powell emphasizes the value of forward guidance during the presser, the more the market will expect Warsh to push harder to dismantle it. The surprise of this press conference lies in what is left unsaid. Key things to watch next. The Senate voting timeline is the first watershed moment. The DOJ dropping the case removed the major obstacle for Senator Tillis, but his public stance post-case-drop remains an information gap. If the Banking Committee passes it smoothly in the first week of May, a full Senate vote is expected during the week of May 11-14—completion within this window means Warsh takes over on May 15, the day Powell's term ends. Any delay would mean Powell chairs one more meeting as acting Chair, likely on June 16-17. The market logic for these two outcomes differs significantly: the former concentrates the pricing impact of "no forward guidance" into the second week of May; the latter would stretch and disperse this pressure, giving the market more breathing room. Warsh's first public statement after confirmation is more important than the confirmation itself. Once the transition is complete, the nature of the uncertainty shifts—from "who is at the helm" to "will he actually implement what he said at the hearing." Historically, no major central bank has completely abolished forward guidance without any alternative framework. Even the RBA, when it abandoned yield curve control in 2021, set a transition period. If Warsh announces some form of "data-dependent, scenario-based guidance," the market shock would be notably narrower; if he opts for complete silence, that would mark the true beginning of the "no-signal era." The MOVE index is the most direct observation window. A move from 67 towards 75-80 signals the bond market moving first; a break above 90 would likely see volatility in equities and credit markets follow. The magnitude of data shocks between FOMC meetings is also worth monitoring. The follow-up actions of other global central banks are not tail risks but variables that need pre-calibration. The ECB and BOJ have used the Fed's policy path as a key external reference over the past decade. Once this reference frame becomes unreadable, divergence in monetary policies will widen, and cross-market transmission logic will become more complex—rising exchange rate volatility is the most underestimated transmission path in this chain. The June 16-17 FOMC meeting is the ultimate validation point. It will likely be the first meeting chaired by Warsh—the first statement without a dot plot, the first press conference potentially with a changed format or frequency. All judgments about "regime change" will be reconciled there. The current mainstream market expectation is to treat this as personnel news—wait until Warsh is actually in office. But losing an anchor is a process, not a single point in time, and this process begins next Wednesday.
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