Alright, crypto friends! Hold on tight and get ready for a big scoop! The president is anxious, and the crypto world is about to change! Trump wants to "change the captain" at the Fed to force a rate cut! This is way more exciting than watching candlestick charts!
I am your crypto blogger, watching the market and paying attention to macroeconomic winds every day. Today, we won't talk about the technical side, but the true "top-level design" that can stir up waves—the Fed Chair position may be about to change hands ahead of schedule!
What's going on? Simply put, Trump is extremely unhappy with the current Fed Chair Powell! Why is he unhappy? Because Powell still refuses to cut rates decisively! Trump feels this severely hampers his economic efforts and reelection prospects. This dissatisfaction is overflowing to the point where he can't wait any longer!
According to the rules, Powell has 11 months left in his term. Previously, when replacing someone, the announcement of the new chair was made three to four months in advance. But our "knowledgeable king" Trump is now in such a hurry, calculating to announce who the next Fed Chair will be this summer!
Why the rush? The purpose shouldn't be too obvious! It's just looking for someone "obedient"! Trump needs someone who can faithfully execute his will—put simply, just hurry up and cut rates! Open the faucet wide! Moreover, this person needs to have the ability to persuade other influential members of the Fed's decision-making committee to join in on the easing. This is no small difficulty, as Trump currently cannot move many of the 12 members on that committee.
Who are the candidate "gladiators"? Currently, a few individuals are bouncing around:
Kevin Warsh: Former Federal Reserve Governor, a person from the Bush era, is now the top favorite! Trump has long been flirting with him. This person has a very tough personality; he himself said, "My fatal flaw is that I say whatever I believe. If the president wants a softie, then this job is definitely not for me." He has previously been labeled as "hawkish" and has publicly expressed disdain for ultra-low interest rates, even praising the Bank of Japan's governor for working to tighten monetary policy... Can this demeanor be what Trump wants in a "easing pioneer"? Even Trump's people are murmuring: if this guy really gets in, isn't he going to go solo?
Larry Kudlow: Current Director of the National Economic Council and economic advisor to Trump. However, it is said that he himself is not very interested in this job.
Steven Mnuchin: Current Secretary of the Treasury! His subordinates are pushing him forward, believing he has a knack for handling the chaotic tariff policies, and Wall Street agrees. Mnuchin has publicly stated he will serve his full term as Treasury Secretary, but privately? It is said he is "full of praise" for the idea of becoming the Fed Chair and hasn't completely rejected it! More importantly, he recently said, "I'm very willing to do what President Trump hopes I will do." This statement, take it in!
David Malpass: Former President of the World Bank, appointed during Trump's first term. He recently wrote an article criticizing the Fed's outdated models and called for a rate cut, which is very much to Trump's liking! But... Trump privately complained: worried that his "TV image" isn't good enough?
Christopher Waller: Current Federal Reserve Governor, originally appointed by Trump 5 years ago. He recently jumped out first to say that the Fed should cut rates by the end of July! This "vanguard" stance successfully caught the attention of the White House.
However, if Trump wants to play the "shadow chair" card, the risks are not small:
New chair becomes a target: Announcing months in advance, this "nominee chair" will immediately become a focus of criticism. The market will closely watch his/her every word and action, and future Fed colleagues will also be displeased—you're not even in position yet, and you want to dictate?
Caught in the middle: If the "shadow chair" helps Trump criticize the Fed's current policies, it will offend future colleagues; if they speak on behalf of the Fed, it might anger Trump, potentially leading to immediate "exclusion."
Is Powell sticking around? Don't forget, Powell's term as Fed Governor lasts until 2028! Even if he is no longer chair by next May, he can still remain on the Fed Board. At that time, with the new chair taking office alongside former chair Powell, that scene... just thinking about it is awkward!
This matter has a huge impact on our crypto circle! The expectation of a Fed rate cut is one of the biggest driving forces in the market recently! With Trump's antics:
Expectations become more chaotic: Announcing the new chair in advance will surely trigger wild speculation and gaming in the market regarding the new chair's policy tendencies. Is it dovish or hawkish? How aggressive will the easing be? Volatility will definitely increase!
"Politicization" risk surges: The Federal Reserve has always touted its independence from politics. Trump's blatant attempt to install "his people" to force a rate cut seriously challenges this tradition. If the Fed is truly subject to political pressure, its policy credibility and effectiveness will suffer greatly, which is not good for the global market.
In the short term, this might stimulate "rate cut expectation speculation": The market may feel that since Trump is so eager to change personnel, the new chair must be a big dove, and rate cuts will come faster and more aggressively? This expectation might temporarily push up risk assets.
Long-term instability seeds: Once the Fed's independence is compromised, its policy foresight and credibility will be damaged, potentially leading to greater market turmoil and a crisis of trust in the future.
Friends, Trump's "Fed reshuffle" drama is definitely more exciting than American TV dramas! This directly relates to how much and how fast the global easing doors will open in the coming years! Rate cut expectations are fuel for the crypto bull market, but political interference is poison for the market! Who do you think Trump will ultimately choose? Will Waller's hard stance catch his eye? Can Mnuchin's ambiguous attitude prevail? Or will a dark horse emerge? More importantly, will this power game let Bitcoin's bull market fly higher or bury hidden dangers of collapse?
Follow me, click on Xiao Chen's homepage to continue tracking this top financial power struggle! In the next issue, we will delve into the candidates' potential attitudes toward cryptocurrencies! Give a thumbs up, and let's discuss your views in the comments! Who do you think will be the next Fed Chair? How will rate cut expectations impact Bitcoin?