This week's focus for global investors is entirely on Trump's nomination for the next chairman of the Federal Reserve. Current chairman Powell's term will end in May 2026, and Trump’s final statement could come at any moment, while the candidate odds have reversed several times.
Initially leading, White House National Economic Council Director Hassett saw his odds plummet after Trump expressed a desire for him to remain in his position, and he has now fallen to an underdog along with Federal Reserve Governor Waller. Former Federal Reserve Governor Warsh's odds soared to over 60% last week, but over the weekend, he was surpassed by former BlackRock executive Rick Riedel, who has become the biggest dark horse. After all, Trump is known for his inconsistent statements and his ability to distract, and the differences in the four candidates' positions are key.
1. Riedel, by precisely hitting Trump's demand for "dovish easing," openly calls for reducing the benchmark interest rate to 3%, holds a tolerant attitude toward the slightly over 2% inflation target, and downplays concerns about the deficit. With no central bank background, he has practical experience on Wall Street and is easily confirmable through the Senate, maintaining a steady support rate at the top.
2. Warsh, on the other hand, is a representative of the hawks, advocating for "balance sheet reduction and interest rate cuts to proceed in parallel," and is highly vigilant about inflation, which clearly contradicts Trump's demands and is considered to have very low nomination odds.
3. Hassett, although once a dove, has recently emphasized the independence of the Federal Reserve, creating a divergence from Trump's radical demand for interest rate cuts. It’s estimated that Trump fears he might turn against him once in office, which is why his attitude suddenly changed.
4. As for Waller, as a centrist old bureaucrat, his policy positions are not much different from Powell's, making his presence relatively weak.
The impact on assets is clear: Riedel's election would be a short-term boon for U.S. stocks and bonds, pushing up commodities, but the dollar may depreciate, and the sustainability of the AI bubble is in doubt; Warsh’s election would lead to a strong dollar path, with reduced expectations for interest rate cuts, exacerbating global asset volatility, and gold, silver, and commodities would be under pressure.
$BTC
$GPS
$ETH
Initially leading, White House National Economic Council Director Hassett saw his odds plummet after Trump expressed a desire for him to remain in his position, and he has now fallen to an underdog along with Federal Reserve Governor Waller. Former Federal Reserve Governor Warsh's odds soared to over 60% last week, but over the weekend, he was surpassed by former BlackRock executive Rick Riedel, who has become the biggest dark horse. After all, Trump is known for his inconsistent statements and his ability to distract, and the differences in the four candidates' positions are key.
1. Riedel, by precisely hitting Trump's demand for "dovish easing," openly calls for reducing the benchmark interest rate to 3%, holds a tolerant attitude toward the slightly over 2% inflation target, and downplays concerns about the deficit. With no central bank background, he has practical experience on Wall Street and is easily confirmable through the Senate, maintaining a steady support rate at the top.
2. Warsh, on the other hand, is a representative of the hawks, advocating for "balance sheet reduction and interest rate cuts to proceed in parallel," and is highly vigilant about inflation, which clearly contradicts Trump's demands and is considered to have very low nomination odds.
3. Hassett, although once a dove, has recently emphasized the independence of the Federal Reserve, creating a divergence from Trump's radical demand for interest rate cuts. It’s estimated that Trump fears he might turn against him once in office, which is why his attitude suddenly changed.
4. As for Waller, as a centrist old bureaucrat, his policy positions are not much different from Powell's, making his presence relatively weak.
The impact on assets is clear: Riedel's election would be a short-term boon for U.S. stocks and bonds, pushing up commodities, but the dollar may depreciate, and the sustainability of the AI bubble is in doubt; Warsh’s election would lead to a strong dollar path, with reduced expectations for interest rate cuts, exacerbating global asset volatility, and gold, silver, and commodities would be under pressure.
$BTC
$GPS
$ETH
