Academy Securities strategist Peter Tchir believes the market is currently overly focused on whether Warsh's future "reaction function" will change, but what's more concerning is what data the Federal Reserve intends to use for policy decisions. His core judgment is that Warsh may not need to completely rewrite the policy formula; the real change is likely on the input side: in addition to traditional official indicators like the PCE, the Fed may place greater emphasis on real-time inflation, rents, business prices, and other higher-frequency data sources, rebuilding a new inflation observation framework.
The market has historically been accustomed to betting on "how the Fed will interpret" the same set of data, but if even the data itself changes, the trading framework will shift accordingly. Some high-frequency inflation indicators previously considered supplementary references may become crucial bases for policy discussions. For the market, this means future policy shifts may not necessarily stem from "different conclusions drawn from the same data," but could also come from "the Fed starting to look at a different set of data."
