According to The New York Times, citing insiders, Federal Reserve Chair Wash is considering cutting the frequency of annual policy meetings. If this plan materializes, it will be one of the most significant changes in the Federal Reserve's operation in decades.

Since 1981, the Federal Reserve has maintained the practice of holding policy meetings eight times a year, roughly every six weeks. At this week's Fed meeting, Wash proposed the idea of adjusting the frequency, with new meeting schedules likely finalized before the next meeting in mid-September, even if the specific changes will be implemented later.

Reducing the frequency of policy meetings means the Federal Reserve's opportunities to adjust rates have correspondingly decreased. Industry insiders have expressed concerns:

Weakened responsiveness: This may slow the Fed's ability to respond to changes in inflation and the labor market.

Reduced transparency: Markets will have fewer channels to obtain monetary policy signals, reversing the Fed's decades-long trend of strengthening information transparency.

| September may be finalized; the chairman's statements spark speculation

What specific developments are currently made regarding the Fed's interest rate cut meeting? What are the external concerns?

The core details are as follows:

1. Promotion method: No rush to open discussion, direct "point-to-point" collection of opinions

Insiders revealed that Wash did not organize a formal public discussion at this week's meeting, but instead introduced officials to relevant legal authorizations (such as minimum annual meetings and scheduling), and asked everyone to give him their ideas directly after the meeting.

2. Legal bottom line: At least 4 times per year is sufficient

According to the 1935 Banking Act, which established the modern structure of the Federal Reserve, the Fed is required to hold "at least" four policy meetings per year. Additionally, the Federal Reserve Chair himself or any three committee members have the authority to convene meetings.

3. Timeline: September may be finalized, effective next year

Although the Fed's official website has already announced the remaining time of this year and the 2027 meeting date, it is marked as "tentative." This means the new meeting schedule is very likely to be finalized before the next meeting in mid-September, even if the specific changes will be implemented later.

4. The biggest suspense: The Chairman's statements were "contrarian" and "contrarian," and how many times was he ultimately cut off?

There is considerable uncertainty about how many meetings the Fed will ultimately cut. It is worth noting that at a congressional hearing in April this year, Wash clearly stated that four meetings per year are "not enough" and that "holding more meetings is appropriate." This seems somewhat at odds with the current direction of the "reduction meetings," so how the final adjustment will be made remains highly uncertain.

| The Federal Reserve may move toward "fewer meetings, less talking"

If the Fed truly reduces the number of policy meetings, it will break the fixed rhythm of "eight times a year, roughly every six weeks" that has been in place since 1981. This major transformation has sparked market concerns about "reduced transparency," and is highly consistent with Walsh's approach since taking office.

1. Say goodbye to "following the rules," and the market loses its predictable reference

Since Paul A. Volcker established the system as chairman in 1981, the fixed rhythm of eight sessions per year has provided Federal Reserve officials, Wall Street investors, and market forecasters with a predictable framework of reference. Within this framework, the Fed regularly publishes detailed internal forecast briefings (Tealbooks) and publishes meeting minutes (usually six weeks) after meetings, with the full minutes only made public five years later.

2. Concerning transparency: the information window is compressed

Cutting the number of meetings not only means fewer opportunities to vote on interest rates, but more critically, it greatly compresses the external window for understanding the Fed's policy direction, further reducing policy transparency.

3. Walsh's "silent" style: fewer meetings, less talking

Reducing the frequency of meetings aligns with Walsh's overall style of "reducing Fed attention" since his inauguration. Since taking over the Fed in May this year, he has drastically shortened the length of policy statements after each meeting, rarely publicly expressing views on the economy and interest rate direction, and is even considering cutting back the "post-meeting press conference" that has been customary since 2019.

|Walsh's "institutional reform" is now fully rolled out

Reducing the number of policy meetings is not an isolated move by Wash, but rather an important part of his overall plan to advance "institutional reform" since taking office at the Fed in May this year.

1. Reform Blueprint: Comprehensive "Check-up" of Five Major Working Groups

Since taking office, Walsh's core narrative has been to carry out a thorough "institutional reform" of the institution he has long criticized. Currently, this vision has been realized through the establishment of five working groups that are comprehensively reviewing and reconstructing core issues such as the Fed's external communication methods and data sources.

2. Historical reversal: Overturning the conclusion of the "Eight Meetings" from over 30 years ago

The Federal Reserve has historically discussed the frequency of meetings. As early as 1988, in an internal memo, Fed officials had already weighed the pros and cons of "increasing the number of meetings." The conclusion at the time was that while frequent meetings could allow for more timely review of new information, they also brought significant preparation and travel inconveniences, so holding eight meetings a year was considered "appropriate."

Today, Wash's reform direction is completely at odds with assessments from over 30 years ago, as he seeks to reshape the Fed's operating model by reducing meetings.

Once the plan to reduce the number of policy meetings is officially implemented, it will profoundly change the Fed's policy flexibility, market information flow, and the way the central bank communicates with the market. The impact of this series of systematic measures will remain a key focus of market scrutiny going forward.

Kingtech Perspective | Global macro has entered an era of "low transparency," and forward-looking guidance has lost its effect

The Fed's planned rate cut meeting and drastically reduced policy statements marks the end of the "Forward Guidance" framework established since the Bernanke era. In the past, the market was used to "following the chart," pricing precisely through the Fed's dot plot and post-meeting statements. Under Walsh's "silent" reforms, the Fed will proactively cut off some expectations management and return to a "data-dependent" camera-based decision-making model.

This means the global macro environment has officially moved from "open card games" into the "blind box era," making it exponentially more difficult for investors to predict the Fed's policy path.

Beware of the soaring risk premium of "long-term U.S. Treasuries," embrace the "high dividend" defense
. Under the new normal of "fewer meetings and less talking," as the Fed no longer provides sufficient "safety cushions" and forecast guidance for the market, the term premium for long-term U.S. Treasuries (such as 10-year and 30-year) is very likely to rise to compensate investors for the additional policy uncertainty.

In terms of asset allocation, it is recommended to moderately reduce exposure to long-duration U.S. Treasuries to guard against the risk of steeper yield curves. At the same time, during the "blind box period" of macro policies, "dividend assets" with strong free cash flow, high dividend yields, and reasonable valuations will become the best safe haven against macro fluctuations.

Seizing the extreme game of "Data Day," positioning for "water sellers," and reducing the frequency of derivatives
meetings mean that more economic data (such as non-farm payrolls, CPI, etc.) accumulate before each meeting, making decisions at each meeting more information-gap and potentially making policy adjustments more suddenly. This leads to a sharp increase in market volatility on key data release days and interest rate meeting days.

For institutional investors, it is recommended to focus on two types of opportunities: first, building straddle strategies through options and other derivative instruments to capture pricing misexecutions caused by high volatility; Second, focus on fintech and data service providers that can provide high-frequency alternative data (such as credit card spending data, real-time logistics data) during the "data vacuum period," as they will become essential "water sellers" seeking new pricing anchors during the Fed's "quiet period."