Who will be the alternate Fed governor?
Trump said in an interview yesterday that he would decide this week on a nominee to replace the outgoing Fed governor. The market believes this person will be the next chairman.
Polymarket's current candidate speculation is focused on three people. Let me comment:
- Kevin Walsh, 35% probability
Estée Lauder's son-in-law, a Wall Street veteran and former Fed governor, appears relatively neutral based on previous public statements and should be a candidate acceptable to all parties. He has criticized the Fed's quantitative easing (QE) and hopes to promote reform and policy regularization.
If elected, the market should trade on interest rate cut expectations in the short term, but be bearish in the long term (opposed to QE), and US Treasury bond yields may fall before rising.
- Kevin Hassett, 31% probability
The current White House economic advisor is essentially a Trump follower, constantly defending Trump's policies. He is likely to be Trump's favorite, but will raise concerns on Wall Street about his independence. His election would be bearish for the US dollar (loss of independence) and bullish for the US stock market (more interest rate cuts).
Waller 19% probability.
The current trustee, an economics professor, has the advantage of being an academic, but the disadvantage of being too academic. I think he's a low probability candidate. He lacks the social skills and Wall Street experience, and is essentially a pawn in a role he's used as a tool. He's even less promising than Bowman.
If elected, he'll likely trade on a rate cut, as he's already publicly dovish, which would be slightly negative for the dollar.
Of course, there's also the 20% probability of an "unknown" candidate, but that's unclear. $BTC #美联储何时降息？ #美联储11月降息预期升温
Trump said in an interview yesterday that he would decide this week on a nominee to replace the outgoing Fed governor. The market believes this person will be the next chairman.
Polymarket's current candidate speculation is focused on three people. Let me comment:
- Kevin Walsh, 35% probability
Estée Lauder's son-in-law, a Wall Street veteran and former Fed governor, appears relatively neutral based on previous public statements and should be a candidate acceptable to all parties. He has criticized the Fed's quantitative easing (QE) and hopes to promote reform and policy regularization.
If elected, the market should trade on interest rate cut expectations in the short term, but be bearish in the long term (opposed to QE), and US Treasury bond yields may fall before rising.
- Kevin Hassett, 31% probability
The current White House economic advisor is essentially a Trump follower, constantly defending Trump's policies. He is likely to be Trump's favorite, but will raise concerns on Wall Street about his independence. His election would be bearish for the US dollar (loss of independence) and bullish for the US stock market (more interest rate cuts).
Waller 19% probability.
The current trustee, an economics professor, has the advantage of being an academic, but the disadvantage of being too academic. I think he's a low probability candidate. He lacks the social skills and Wall Street experience, and is essentially a pawn in a role he's used as a tool. He's even less promising than Bowman.
If elected, he'll likely trade on a rate cut, as he's already publicly dovish, which would be slightly negative for the dollar.
Of course, there's also the 20% probability of an "unknown" candidate, but that's unclear. $BTC #美联储何时降息？ #美联储11月降息预期升温
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