Trump gave a 39-minute interview to CNBC on Tuesday, in which he talked about many issues, such as the manipulation of non-farm payroll data, Powell's late interest rate cut, the upcoming announcement of a new Federal Reserve chairman, the announcement of drug tariffs, and tariff threats against India and the European Union.

Among the most far-reaching market impacts will be the announcement of the short-term successor to Fed Governor Kugler and the next chairman.

First, there are currently four candidates on Trump’s list (excluding US Treasury Secretary Benson), three of whom are known and one is unknown.

The three known candidates are:

- Kevin Warsh, former Federal Reserve Governor

- Kevin Hassett, Director of the White House National Economic Council

- Christopher Waller, current Federal Reserve Board Governor

Now we are curious about the "unknown candidate" - if it is not revealed in advance, no matter who it is, it will cause market surprise. Trump is in a hurry to announce it in order to influence the decision of the Federal Reserve's September meeting.

Second, once the new Fed chair is announced, the market is likely to increase its bets on a Fed rate cut. Goldman Sachs has released a trading strategy to protect against a major Fed move (a 50 basis point rate cut in September).

Goldman Sachs recommends buying a call spread option combination based on the September short-term interest rate contract (SFRU5). Specifically, buy the SFRU5 96.00/96.125 call spread. Currently priced at 95.935, this trade only costs 2 points. If a basis point rate cut occurs in September, this contract could potentially rise above 96.125, creating a significant profit opportunity. This contract expires on September 12th, and the Federal Reserve meeting is on September 17th. This means the market typically "basically prices in" the possibility of a rate cut about five days in advance, making this strategy perfectly timed to coincide with the market's "pricing window."

However, Trump needs to consider two additional issues. First, if his nominee for the new Fed chair aligns with his own views, he risks becoming isolated within the Fed (regardless of who holds the chair's role, it is their responsibility to build consensus among the other voting members), thus hindering his ability to initiate rate cuts. Second, and more practically, he understands the market impact of firing Powell, and has been holding back for a long time. Trump values the market so highly that he will undoubtedly strive to minimize the impact.

Considering these two issues, current Board member Waller is the best choice: someone who is "compromiserable, understands policy, and is willing to cut interest rates"—a candidate who "doesn't look like someone manipulated by Trump." If Waller isn't chosen, then his support for rate cuts could change, and Trump would simply gain another opponent within the Fed. It's clear that Waller's high-profile support for rate cuts is intended to secure a seat at the Fed Chair. Choosing Waller also inherently benefits from the support of his peers within the Fed, a privilege unavailable to others. However, Trump also worries that Waller could become "the next Powell."

If the next chairman fails to gain the market's trust, inflation expectations will rise sharply and the Fed will become more divided. In other words, the real market influence is not whether to cut interest rates, but who decides whether to cut interest rates.