Market Analysis: If Kevin Wash is nominated as the chairman of the Federal Reserve, the US dollar is expected to regain vigor.

Any evaluation of Kevin Warsh's potential leadership of the Federal Reserve must start with his past views. However, for the US market facing rising risk premiums, this is undoubtedly a good sign. Warsh's most familiar resume segment to the market is his tenure as a Federal Reserve governor from 2006 to 2011, a period that spanned credit booms, the 2008 financial crisis, and the early stages of recovery post-crisis. Overall, his speeches and comments during this period consistently focused on reputation, restraint, and institutional constraints to construct a monetary policy framework. Warsh was skeptical about maintaining loose policies for an extended period, openly opposed balance sheet radicalism, and had an unusually high tolerance for market volatility if it could uphold price discovery mechanisms. Controlling inflation is a prerequisite for sustainable growth, rather than optimizing variables for employment. Warsh's new comments are particularly relevant to the market, especially for the dollar, as in the past year exchange rates increasingly reflected investors' concerns about institutional credibility and government risks. Warsh has explicitly pointed out that the economic and institutional leadership of the United States is the cornerstone of the dollar's reserve currency status, which he believes is a privilege earned through reputation, not a bargaining chip to be exchanged freely.