The Ministry of Justice dropped the case, Powell entered the field, FOMC next week - the countdown to the change of leadership of the Federal Reserve is on, the era of "without forward guidance" is coming.

Next Wednesday, Powell will take the stage at a press conference and make a decision with no suspense - to keep interest rates unchanged - to announce the end of the meeting. What the market is really waiting for is not this decision. On Friday, the US Department of Justice dropped its criminal investigation against Powell. The biggest political obstacle that had been used to block Trump's nominee, Kevin Warsh, had thus been removed. The Kalshi prediction market's data for that day: The probability that Warsh will be officially confirmed before Powell's term expires on May 15 jumped from 30% to 84%. In other words, the press conference on April 29 will likely be Powell's last appearance as Chairman of the Federal Reserve. Warsh wants to dismantle the base On April 21, Warsh sat before the Senate Banking Committee and said: "Too many Fed officials, both current and former, advance their opinions in advance, saying where they think interest rates should be at the next meeting, next quarter, or next year." The impact of this statement is much greater than any rate hike or cut decision. At the same hearing, he explicitly called for the abolition of the "dot plot" - a chart released quarterly with rate forecasts from 19 FOMC members. He criticized the core PCE as a "rough estimate" and said inflation "is a choice," characterizing the high inflation in 2021-22 as a policy error rather than a result of external shocks. As for the post-FOMC press conferences, he refused to commit to continuing them: "The pursuit of truth is more important than repetition." He also suggested the possibility of reducing the number of meetings per year, but did not provide a specific number. Forward guidance - the mechanism by which the Fed informs the market in advance of what it plans to do - was established by Bernanke after 2008. From calendar-based commitments to conditional commitments, to post-FOMC press conferences, dot plots, and statements interpreted word for word, this framework has quietly become the implicit foundation for global asset pricing over the past 15 years. Warsh says he wants to dismantle this foundation. Powell has already started stepping back Those who have read the records of the January and March FOMC press conferences should already have seen something. On January 28, Powell said: "The Committee has not attempted to specify when or under what criteria a rate cut would occur." This statement was noticeably softer in tone compared to his usual forward-looking statements over the past few years. By March 18, he went further - when asked whether the forward guidance could change, he rare...