Wash unexpectedly wins the competition for the Chairman of the Federal Reserve, and market volatility is expected to rise.

Trump has turned the selection process for the Chairman of the Federal Reserve into a game show, and the ultimate winner Kevin Wash can be considered the most unexpected choice. This decision is bound to exacerbate market volatility and may leave all parties, including Trump himself, unsatisfied. This nomination will first trigger a strong cognitive conflict on Wall Street and in policy circles. Although Trump had promised to choose a Federal Reserve Chairman who could implement loose monetary policy, Wash has always been seen as a hawkish figure. This background will make it difficult for Wash to establish credibility. If he chooses to cut interest rates, the market will see him as abandoning principles and succumbing to Trump's puppet; if high interest rates are maintained for too long, conflict with Trump is inevitable, which in itself will cause market volatility. Before Powell's term ends, Wash's "shadow term" has already begun, which may lead to policy signal confusion and market misinterpretation. It is worth noting that Wash's victory seems to stem from "survivor logic." When the Trump team lost interest in Haselt, he became the only option left. Until last December, Haselt was still the top favorite in the prediction market, but concerns about his potential nomination pushing up bond term premiums, coupled with warnings from Wall Street executives that those who have too close a relationship with the president should not lead an independent central bank, ultimately changed the situation.