The Federal Reserve is unlikely to raise interest rates, but the possibility of a rate hike objectively exists. Kevin Warsh does not favor forward guidance, and he may not want to mechanically conform to policy expectations already priced into the market. If this is indeed the case, and Warsh leans towards a rate hike (which is a possibility), then acting now would be more appropriate to avoid waiting until the next policy meeting when rate hike expectations have been fully priced into the market. This is precisely the guiding principle of the new Federal Reserve. Even if the Federal Reserve's decision remains unchanged as expected, there will still be some unexpected factors. The upcoming Federal Open Market Committee (FOMC) meeting will be the first in a long time where so many observers are unable to predict the outcome. The market expects a 66% probability of keeping interest rates unchanged and a 34% probability of a rate hike. The logic of advocating for holding rates steady stems partly from the decline in June inflation data. The Trump administration's apparent pause in its hostile stance towards Iran also creates a favorable environment for the Fed to maintain the status quo. From a macroeconomic perspective, excluding the technology sector, the US economy shows multiple downside risks. Furthermore, five task forces are currently pushing forward with the restructuring of the Fed's operating framework. In summary, maintaining interest rates unchanged is fully justified—remaining on the sidelines at this stage is the prudent choice. That said, the Fed's choice of a precautionary rate hike is also understandable. Central banks often take such measures when inflation is significantly higher than the target range. Therefore, the market has already gradually priced in this rate hike, which is a logical trading expectation. Betting that the Fed will not raise interest rates at all in the coming months is a more difficult judgment. Long-term bond yields hit new highs, reflecting some market anxiety, although the rise in yields is mainly driven by higher real interest rates. Crucially, a 25 basis point rate hike would help demonstrate Chairman Kevin Warsh's commitment to price stability and further strengthen the credibility of the Fed's policies. Another scenario is that a majority of committee members vote in favor of a rate hike, but Warsh himself remains neutral. After all, he doesn't mark his position on the decision matrix and hasn't indicated whether he's hawkish or dovish. If the committee ultimately implements the rate hike, Kevin Warsh is unlikely to publicly express his support, but will simply comply with the decision. He did the same when the previous FOMC meeting announced maintaining the current interest rate, advocating for "keeping the status quo." Another possibility is that the committee decides to raise rates by a majority vote, but Warsh remains neutral. Again, he doesn't mark his position on the decision matrix and hasn't indicated whether he's hawkish or dovish. If the committee does decide to raise rates, Kevin Warsh is unlikely to explicitly express his support, but will simply follow through. This is what he did at previous FOMC meetings when he advocated "maintaining the status quo." That's why this meeting is quite crucial; its importance is even greater if a rate hike is indeed decided. From Warsh's perspective, this is undoubtedly a classic example of "not providing future guidance," a move that is clearly attractive. Most institutions advocate against rate adjustments. Inflation expectations are at a relatively manageable level, which is reassuring. Furthermore, the yield curve situation does not support initiating a rate hike cycle—specifically, the 5-year rate is higher than the rates of other maturities on the curve. The Fed typically does not begin raising rates when the 5-year rate is high. If the Fed does decide to raise rates (whether at this meeting or the next), then judging from the shape of the yield curve, subsequent rate hikes are likely to be canceled, and funding rates will be lower than current levels within 12 months. Finally—if Warsh intends to raise rates (and perhaps he does), it would be better to do so at this meeting rather than waiting for the next automatic market rate cut. He will certainly have an urge to demonstrate independence from the market. It needs to be clear that the market consensus is still that rates will remain unchanged this time. However, the expected 2:1 divergence provides Walsh with a reference point for decision-making, and he may choose to deliver an unexpected and powerful blow.