HTX DeepThink: Weakened Forward Guidance Fails to Soothe Market, Federal Reserve Credibility Becomes Core to Risk Asset Pricing

HTX DeepThink columnist and HTX Research analyst Chloe (@ChloeTalk1) pointed out in her analysis that global risk assets continued to come under pressure this week. Federal Reserve Chair Kevin Warsh attempted to weaken forward guidance (Forward Guidance) for the first time, hoping to make market prices a more direct economic feedback mechanism. However, the market did not interpret the rise in long-term interest rates as a natural tightening of financial conditions, but instead interpreted it as inflation risks resurfacing and a decline in Federal Reserve policy credibility. The 30-year US Treasury yield rose to 5.2%, the US dollar weakened, and US stocks retreated, reflecting that investors are beginning to demand higher risk premiums rather than betting on an improvement in economic fundamentals.