Castle Securities said that Federal Reserve Chairman Kevin Walsh promised to curb inflation but did not explain how to implement it, which created new uncertainty for investors. Although Walsh has stated many times that the Federal Reserve needs to reduce consumer price increases that have exceeded the target level for five consecutive years, the Federal Reserve once again kept interest rates unchanged last week, even though three policy makers supported an immediate rate hike. On the contrary, Walsh believes that the recent rise in US Treasury yields has tightened financial conditions and enabled the market to play a role in some of the Federal Reserve's tightening policies. He also hinted that after evaluating the monetary policy framework, the Federal Reserve may reconsider whether it should continue to use its preferred inflation index as the current policy benchmark. Investors reacted by selling off long-term US Treasury bonds, driving up inflation expectations, causing the dollar and stock market to fall. Nohshad Shah, head of fixed income sales at Castle Securities in Europe, the Middle East and Africa, wrote in the report that these market changes highlight “challenges to the credibility or clarity of the policy framework.”

Castle Securities said that Federal Reserve Chairman Kevin Walsh promised to curb inflation but did not explain how to implement it, which created new uncertainty for investors. Although Walsh has stated many times that the Federal Reserve needs to reduce consumer price increases that have exceeded the target level for five consecutive years, the Federal Reserve once again kept interest rates unchanged last week, even though three policy makers supported an immediate rate hike. On the contrary, Walsh believes that the recent rise in US Treasury yields has tightened financial conditions and enabled the market to play a role in some of the Federal Reserve's tightening policies. He also hinted that after evaluating the monetary policy framework, the Federal Reserve may reconsider whether it should continue to use its preferred inflation index as the current policy benchmark. Investors reacted by selling off long-term US Treasury bonds, driving up inflation expectations, causing the dollar and stock market to fall. Nohshad Shah, head of fixed income sales at Castle Securities in Europe, the Middle East and Africa, wrote in the report that these market changes highlight “challenges to the credibility or clarity of the policy framework.”