If Kevin Walsh smoothly takes over as the Fed Chair, the global monetary policy landscape is likely to see a whole new wave of changes and adjustments.
Walsh has a top-notch educational background from prestigious institutions and belongs to an elite knowledge circle; his spouse is a core heir of the Estée Lauder family. In terms of experience, he previously served as a Fed governor and was a key aide in the White House Economic Council during the Bush administration, deeply involved in managing the 2008 global financial crisis. Moreover, he has a close personal relationship with Trump, with tight political ties.
Compared to the Fed's conventional operations over the years, Walsh's monetary policy ideas are quite unique and special. The core framework revolves around simultaneous balance sheet reduction and interest rate cuts. He consistently adheres to one central viewpoint: the root cause of persistent inflation lies in long-term excessive money supply. Therefore, by continuously reducing the balance sheet and tightening market excess liquidity, inflation can be suppressed at its source; at the same time, interest rate cuts will provide reasonable liquidity to the real market, seeking balance between steady growth, preventing deflation, and controlling inflation.
Given the current political demands, once Walsh officially takes office, to align with Trump's economic governance needs, an interest rate cut is almost an inevitable choice. Coupled with his inherent ideology, aggressive balance sheet reduction will likely proceed simultaneously. However, this combined strategy has inherent contradictions, with the biggest real-world challenge needing to be addressed: if the Fed conducts massive balance sheet reduction and sells off US Treasuries, who will absorb and digest the vast amount of bonds?
$BTC From the recent developments in the Middle East, the implementation of this idealized policy is extremely challenging. Currently, the US has completely blocked the Strait of Hormuz, cutting off Iran's oil export routes and forcing many oil fields to shut down. It's important to note that once oil fields cease production, it takes several months to restart operations, and the supply-demand mismatch directly pushes international oil prices back to the $108 mark.
Overall, Walsh's new policy ideas seem logically consistent but are actually constrained by multiple real-world factors such as geopolitical conflicts, energy prices, and the absorption of US Treasuries. Moving forward, it might be wise to wait for his official appointment, observe the Fed's implemented policies, and then further analyze the overall economic trends.
Walsh has a top-notch educational background from prestigious institutions and belongs to an elite knowledge circle; his spouse is a core heir of the Estée Lauder family. In terms of experience, he previously served as a Fed governor and was a key aide in the White House Economic Council during the Bush administration, deeply involved in managing the 2008 global financial crisis. Moreover, he has a close personal relationship with Trump, with tight political ties.
Compared to the Fed's conventional operations over the years, Walsh's monetary policy ideas are quite unique and special. The core framework revolves around simultaneous balance sheet reduction and interest rate cuts. He consistently adheres to one central viewpoint: the root cause of persistent inflation lies in long-term excessive money supply. Therefore, by continuously reducing the balance sheet and tightening market excess liquidity, inflation can be suppressed at its source; at the same time, interest rate cuts will provide reasonable liquidity to the real market, seeking balance between steady growth, preventing deflation, and controlling inflation.
Given the current political demands, once Walsh officially takes office, to align with Trump's economic governance needs, an interest rate cut is almost an inevitable choice. Coupled with his inherent ideology, aggressive balance sheet reduction will likely proceed simultaneously. However, this combined strategy has inherent contradictions, with the biggest real-world challenge needing to be addressed: if the Fed conducts massive balance sheet reduction and sells off US Treasuries, who will absorb and digest the vast amount of bonds?
$BTC From the recent developments in the Middle East, the implementation of this idealized policy is extremely challenging. Currently, the US has completely blocked the Strait of Hormuz, cutting off Iran's oil export routes and forcing many oil fields to shut down. It's important to note that once oil fields cease production, it takes several months to restart operations, and the supply-demand mismatch directly pushes international oil prices back to the $108 mark.
Overall, Walsh's new policy ideas seem logically consistent but are actually constrained by multiple real-world factors such as geopolitical conflicts, energy prices, and the absorption of US Treasuries. Moving forward, it might be wise to wait for his official appointment, observe the Fed's implemented policies, and then further analyze the overall economic trends.