Yesterday, Trump went even further, stating that if Powell misleads Congress regarding the Federal Reserve headquarters renovation project, he should resign immediately. Everyone knows that it's quite easy to play tricks on engineering projects, whether it's outsourcing to engineering teams or material procurement, which can be quite lucrative. Even if there's no corruption, one can find fault in the renovation design. However, so far, this little issue hasn't sparked much public sentiment, and it is likely to come to nothing in the end.

But the shadow Federal Reserve Chair tactic has been consistently used and has already shown initial results. Previously, Trump has successfully attracted the support of at least three people on the Federal Reserve Board, with Waller being the most enthusiastic. Recently, Trump's core economic advisor, Hassett, has also been pushed to the forefront as a potential competitor to Waller. Even Treasury Secretary Mnuchin may become the next Federal Reserve Chair, after all, there is a precedent of Yellen switching between the roles of Chair and Treasury Secretary.

For Trump, the best candidate is the one who is more obedient, more controllable, and who can implement his interest rate cut policies without backtracking after taking office. After all, the considerations when in opposition and in power are different. Even Powell was nominated by Trump, and if the new Chair changes their stance to maintain the independence of the Federal Reserve and does not cater to Trump, Trump would have no recourse under current law. Therefore, for this somewhat gamble-like recommendation, Trump needs the candidate to be deeply bound to him with no way out before taking office to feel assured.

Currently, the candidates being revealed may very well be a smokescreen; after all, what Trump dislikes the most is when others can grasp his pulse and manipulate him, emphasizing an unpredictable authority. After the new Chair takes office next year, the market will continue to have two sides; one could argue that a weak new Chair is bearish, while a strong new Chair who does not listen to Trump is also bearish. One could claim that a new Chair who is obedient and promotes unprecedented unity within the U.S. is bullish, while a new Chair who considers the overall situation is also bullish. In the short term, the market remains swayed by changes in sentiment, while in the long term, the environment of interest rate cuts and easing is a bullish foundation for the long-term prosperity of the financial market.