The Federal Reserve has surrendered—not this Federal Reserve, but the next one.

The two individuals most likely to be nominated as the next Federal Reserve chairman have both sided with Trump.

White House National Economic Council Director Hassett—needless to say, often appears on television to 'cheer on' Trump, always echoing Trump’s views on tariffs, tax cuts, and fighting inflation.

Another potential successor—former Federal Reserve governor Kevin Walsh also 'shocked the world' last night.

Walsh stated in an interview with CNBC that it was correct for Trump to publicly urge the Federal Reserve, the Fed is responsible for inflation, and its hesitation to cut interest rates has damaged its credibility. It is crucial to maintain operational independence in implementing monetary policy, but this does not mean the Fed is independent in all other matters.

First, as a former Federal Reserve official, it is very rare to publicly criticize the Fed—his remarks are seen as siding with Trump. Additionally, his statement that 'it does not mean the Fed is independent in all other matters' (essentially opening the door to political interference in the Fed) shocked traders. If he is nominated as Federal Reserve chairman, last night’s comments would surely cause market turmoil.

Second, during his tenure as a Federal Reserve governor from 2006 to 2011, Walsh consistently advocated for a hawkish interest rate policy to address inflation risks. But now, he advocates for interest rate cuts, aligning with Trump's position. Given this trend, it is likely that Powell will remain a Federal Reserve governor after his term ends (which expires in 2028), creating a check on the next Federal Reserve chairman—this is the real reason Trump wants to fire him.

Third, Trump may nominate the next Federal Reserve chairman around September. Regardless of who takes office, concerns about the Fed's independence are bound to deepen in the market, especially at the moment it announces 'interest rate cuts', which will truly be seen by the market as 'surrender to Trump'—thus, interest rate cuts become bad news. The current situation is also awkward: on one hand, the market relies on the Fed to 'maintain stability'; but on the other hand, the Fed itself is caught in a political vortex.

If Trump successfully replaces the chairman, and the new chairman is 'compliant', the market may face a 'major upheaval'. The world is being repriced; the winner is not necessarily the smartest, but certainly the one who awakens the earliest.