The Federal Reserve's interest rate changes mainly adopt a voting system, consisting of 2 chairs (the chair and the vice chair), 5 governors, the president of the New York Federal Reserve Bank, and 4 of the 11 presidents of the regional Federal Reserve Banks, totaling 12 members.
Every personnel change at the Federal Reserve impacts the market's expectations for future interest rates. The upcoming change in the Federal Reserve's governors, particularly if the new appointee is likely to be directly designated by Trump, could have significant implications for the future direction of the Federal Reserve's monetary policy. I suspect the new appointee will likely become Powell's potential successor, as Powell's term is also nearing its end.
It is expected that this new governor will definitely be a "big dove," collaborating with Trump to accelerate interest rate cuts. This could be seen as injecting certain positive expectations into the market (but expectations are one thing, and reality is another).
Under such expectations, it is highly probable that U.S. Treasury yields may decline first, and risk assets (especially NASDAQ component stocks) will rise in advance, as funds flow back into the stock market.
Therefore, this is Trump's bull market. Although the macro economy is somewhat struggling, it has been artificially supported. Maintaining the midterm elections next year is also of utmost importance!
