All eyes are on the Federal Reserve, which is about to announce the nominee for the next Chairman of the Federal Reserve, signaling that an era is truly reaching a turning point.
Powell may be bowing out in an unprecedented manner. He has become the first Federal Reserve Chairman to face a criminal investigation during his tenure. Regardless of the final outcome of the investigation, this event itself has already inflicted substantial damage on the independence and authority of the Federal Reserve.
Tonight's nomination is not just about replacing one person.
Is it a continuation of a hawkish stance, continuing the fight against inflation?
Or is it about selecting a more politicized, fiscally friendly Chairman?
Is it a technocrat familiar to the market, or a more controllable safety card for the White House?
The Chairman of the Federal Reserve determines the rhythm of the dollar, the valuation of global assets, and whether risk assets can catch a breath. If the Powell era ends in this way, it will be a strong signal that monetary policy is becoming more deeply entangled in the political cycle.
It is highly likely that Trump will nominate Kevin Warsh as Chairman of the Federal Reserve. Warsh joined the Federal Reserve in 2006, becoming the youngest Federal Reserve Governor at the time. During his tenure at the Federal Reserve, Warsh held a hawkish monetary policy stance, but in recent years, he has shifted to support Trump's tariff policies and a faster rate cut stance.