Who is the new chairman, suing Powell, overthrowing the Federal Reserve? Various struggles surrounding the Federal Reserve, who will prevail next week?

Various struggles surrounding the Federal Reserve have finally reached a decisive moment. As a criminal investigation against current Chairman Powell triggers political backlash and a key case to be heard by the Supreme Court next Wednesday, the power struggles surrounding the Federal Reserve may all be resolved next week. Investigation of Powell: Political backlash and "finding a way out" The criminal investigation against Federal Reserve Chairman Powell seems to be evolving into a political backlash against the Trump administration. Last weekend, U.S. prosecutors issued a subpoena to Powell regarding renovation costs at the Federal Reserve building. On January 11, Powell issued a rare strong statement, condemning the move as an excuse to undermine the central bank's independence. This counterattack resonated within the Republican Party and seems to be sending a clear signal to the White House: if the investigation is not stopped, the confirmation process for the next Federal Reserve Chairman nominee will face huge resistance. Facing pressure, Trump's core staff began to try to "find a way out." Last Friday, Kevin Hassett, Director of the National Economic Council, attempted to downplay the situation on Fox Business Channel, calling it a "simple request for information," implying that once the information is submitted, the matter can be closed. Treasury Secretary Scott Benet then echoed this, suggesting that as long as prosecutor Jenny Piero receives a "satisfactory response," the matter can be closed. The logic behind this change in attitude is obvious: Trump needs to maintain the space for deflecting blame for "not ordering the investigation," and quietly ending the case is also in the best interest of the next Federal Reserve Chairman After all, if this administration can use legal means to threaten Powell, future successors will also be under the same shadow all the time. Supreme Court: Cook case and the battle for the survival of the Federal Reserve's independence Compared to the political game surrounding the investigation of Powell, the hearing at the Supreme Court next Wednesday regarding Federal Reserve Director Lisa Cook is even more crucial to the "independence" of the Federal Reserve. In August last year, Trump attempted to dismiss Cook on grounds of "mortgage fraud" (which Cook adamantly denied), and Cook immediately launched a legal counterattack to defend her tenure rights. The outcome of the case will also have a significant impact on the independence of the Federal Reserveif the Supreme Court rules that Trump has the right to dismiss Cook, it will mean that the president can arbitrarily dismiss any Federal Reserve official. Data shows that U.S. GDP grew by 4.3% in the fourth quarter, and Trump has openly requested to lower interest rates to "close to zero" and demanded cooperation from the Federal Reserve Board. Forcing a rate cut in the face of such strong economic data lacks basis in the view of most economists. If investors perceive that the Federal Reserve is no longer independent in fighting inflation, bond yields are likely to rise sharply. Currently, the signals from the Supreme Court tend to protect Cook, but any swaying position in Wednesday's trial could trigger severe market volatility. Who will take the helm: "Two Kevins" or someone else? Meanwhile, the nomination of the next Federal Reserve Chairman may also come to a conclusion next week. Although the list of candidates has included BlackRock executive Rick Reed and current director Christopher Waller, these two have not passed the "loyalty test" as their relationship with Trump is not close enough. The market generally expects the final choice to be between the "two Kevins"Kevin Hassett and Kevin Warsh. Current signs suggest that Hassett is close to being eliminated. Although he is extremely loyal to Trump, Trump bluntly told Hassett last Friday: "I actually want to keep you in this position (White House economic adviser)." Currently, it appears highly likely that former Federal Reserve director Kevin Warsh will win the position of Federal Reserve Chairman. For Wall Street, this may be good news. Damon and other Wall Street executives generally believe that compared to Hassett, who is difficult to shake off the label of "Trump's mouthpiece," the market's reaction to Warsh will be more positive. Warsh is seen as a candidate who possesses both professional competence and a certain degree of independencealthough Trump does not want to repeat the mistakes of Powell and select a chairman who appears "weak but is actually strong." On Wednesday, Trump will deliver an important speech in Davos. Treasury Secretary Benet expects the final decision to be announced before or after Trump's departure. Although Trump may still postpone the decision or even unexpectedly propose other candidates, various signs indicate that the battle for control of the global financial power center surrounding the Federal Reserve has already been decided. This article is reprinted from "Wall Street Seen"; GMTEight editor: Chen Siyu.