JP Morgan's chief US economist, Michael Feroli, stated that Federal Reserve Chair Walsh once again failed to specify how he intends to achieve the inflation target, which will increase the urgency for other committee members to act. As a result, JP Morgan has moved its forecast for a Fed interest rate hike from the second half of next year to December of this year.

The Federal Reserve announced it would keep the federal funds rate range at 3.5% to 3.75%, in line with market expectations. However, Chair Walsh's minimalist communication style has left investors questioning his commitment to curbing inflation. Walsh, as usual, declined to reveal what measures he would take to control inflation and did not indicate whether he would support a rate hike if inflation continues to worsen.

Concerns over inflation have also pushed long-term US bond yields to near 20-year highs, while the Dow Jones Industrial Average plunged over 1,100 points overnight on the 29th. Wolfe Research Chief Economist Stephanie Roth noted that this post-Fed meeting press conference has, to some extent, damaged Chair Walsh's credibility. His communication style appears counterproductive, as the market is not buying his bravado.

Kerry Craig, a global market strategist at JPMorgan Asset Management, also pointed out that the Fed is likely to continue facing questions about its credibility in the future. US inflation has remained above target for five consecutive years, with repeated supply-side shocks. Before the latest escalation of tensions in the Middle East, inflation was trending downward and the labor market was stabilizing, creating conditions for a patient policy approach. However, as the Fed's credibility is scrutinized and it aims to anchor inflation expectations, if inflation progress stalls in the coming months, the Fed may be forced to act.

Robert Sockin, chief US economist at PGIM, said that a loss of market trust could lead to persistently high long-term bond yields and disrupt inflation expectations. He believes that Walsh and other participants will have to further strengthen their hawkish rhetoric in post-meeting public statements to clarify the confusing remarks made during the press conference.