Trump officially nominates Kevin Walsh is the candidate for the position of Federal Reserve Chairman. From Guangyuan to Economic Perspective, Ma Guangyuan Who is Walsh? Why did Trump nominate him as the next chairman? You can understand Walsh from the following perspectives: 1、 Walsh is a post-70s generation. When he became a member of the Federal Reserve Board of Governors in 2006, he was only 35 years old, making him the youngest member in the history of the Federal Reserve. In 2017, he was one of the candidates for the position of Federal Reserve Chairman, but at that time, Trump chose Powell, whom he later detested. 2、 A staunch critic of the Federal Reserve's loose policies. Walsh resigned as Federal Reserve Chairman in 2011 due to his opposition to the second round of quantitative easing policy. His policy stance is against excessive easing and large-scale asset purchases, advocating for a return to the traditional framework of monetary policy, emphasizing the independence of the central bank, and being wary of short-term political pressures interfering with decision-making. He believes that the second round of quantitative easing policy by the Federal Reserve is excessive intervention, and loose policy is prone to market distortion and moral hazard. So he chose to resign in 2011 and has been critical of loose policies ever since, insisting on anti inflation targets on inflation issues and supporting a strong dollar, thus being seen as a hawkish. 3、 As a hawkish, he probably doesn't align with Trump's policy proposals. Why was he chosen by many of Trump's supporters in the end. Because Walsh fought hard to become this chairman, and many of his recent proposals have catered to Trump. For example, he advocates for immediate interest rate cuts, which is completely different from his previous attitude towards inflation. Additionally, he used to support free trade, but now he supports Trump's tariff policies. Wait. Because it is far from the image he previously portrayed as a critic of the Federal Reserve's loose policies, his appearance is a bit unsightly. 4、 Is it because he lacks money? Or is it because of something that one is willing to abandon their past beliefs for the position of Federal Reserve Chairman? Probably not, because his wife is the heir of the famous Est é e Lauder and is not short of money. I feel that this matter is not that simple. Because: 5、 His goal in policy shift is to take down this chairman, and whether or not he listens to Trump after taking over is another matter. Because Walsh is very clear that the monetary policy of the Federal Reserve is not decided by the chairman alone, but by the members of the Open Market Committee. Even if Walsh advocates an immediate interest rate cut, members of the Open Market Committee do not fully listen to him. So, I believe that after taking office, Walsh will not become a puppet of Trump. He will return to his hawkish tone and maintain the independence of the Federal Reserve. On the one hand, by reducing the balance sheet to create conditions for interest rate cuts, and on the other hand, by engaging in political games to maintain a strong stance on the US dollar, a balance is struck between the market and Trump. Walsh will cooperate with Trump on the overall direction of interest rate cuts, but will never fully comply. He will tell Trump that once the Federal Reserve loses its independence, the damage to the US dollar and the United States will be significant. Conclusion: In order to become the chairman, Walsh said some words that catered to Trump. Once he takes office, he will never completely listen to Trump. He will create conditions for the Federal Reserve to cut interest rates by reducing the balance sheet, but he will never immediately cut interest rates according to Trump's requirements, let alone sacrifice the independence of the Federal Reserve. This is the foundation of the United States in the international financial market. His honeymoon with Trump is expected to end soon, but it will not completely break up.