President Donald Trump officially announces the nomination of Kevin Warsh to serve as Chairman of the Federal Reserve Board to replace Jerome Powell.
Today's story took a historic turn. Trump fulfilled his promise and brought in "Kevin Warsh" to steer the economy. Let's understand why this guy in particular and what will change:
A man of the "market" par excellence, Kevin Warsh is known for his strong ties to "Wall Street" and he understands the language of the markets better than the language of academics. This means that the upcoming Federal Reserve decisions will be very "sensitive" to market pulse and prices.
Harmony with Trump: Waller has always criticized the "slowness" of the Fed in taking action. His appointment means we will see a monetary policy that aligns with Trump's vision (lower interest rates, faster growth, and pressure on inflation in unconventional ways).
The "independence" earthquake: This appointment will create a big debate about the "independence of the Fed". Investors might be initially scared of the "politicization" of financial decisions, but at the same time, they will be happy with the possibility of a rate cut that Trump is calling for.
The most important thing you need to understand, my sad trader friend🥸
"Trump brought his friend to market the post" Powell was "slowing down" the economy with high interest rates and Waller is coming to break these gaps. This news means that the "era of high interest rates" is nearing its end and we are entering a new "liquidity" phase that will significantly boost #stocks and #crypto.
#الذهب Bitcoin will monitor Waller's initial "tone". If he confirms a rate cut, get ready for a historic rise.
The dollar: it might weaken a bit against other currencies because the "high interest rates" that supported it are starting to shake.
But you must know that Waller is a smart guy and he won't ruin the contract overnight, but the general "mood" of the market has become "bullish" after this news.
