The left chart shows that the Federal Reserve has gradually shifted from relying primarily on policy statements during the Greenspan era to adding dot plots, forward guidance, QE/QT explanations, and press conferences. During Powell's era, press conferences were extended to every meeting. However, the right chart shows that increased communication has not calmed the market: from 1998 to 2011, the typical volatility of the two-year Treasury yield on Fed meeting days was approximately 132% of that on ordinary trading days; from 2012 to 2026, this rose to 213%, and is expected to approach 370% in 2026. This indicates that meeting days have gradually become a "valence gate" for concentrated information release and position adjustments.
Independently, the Warsh era did not reduce volatility, but rather the "calendar certainty" of its occurrence. In the past, risk was concentrated on the evening of the meeting; in the future, it is more likely to evolve into path-type volatility that runs through the period between meetings, with continuous repricing. With a considerable amount of time until the September meeting, what is truly important may not be what the July statement said, but how each subsequent set of data changes the market's understanding of the Fed's reaction function.
