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The confirmation hearing for Federal Reserve Chair nominee Kevin Woor’s nomination appears to be the focus of global markets on the surface, but in reality, it may just be a carefully staged political performance. The variables that determine the outcome are not at the hearing itself.

The written testimony obtained by Bloomberg in advance is nearly two thousand words long, far exceeding the level of initial testimonies from Powell and Yellen. However, this lengthy statement hardly mentions the monetary policy direction, especially the market’s most concerned topics of rate cuts and balance sheet reduction.

UBS economists analyzed that much of the testimony is spent reviewing personal backgrounds, emphasizing that this is a “critical historical juncture,” and expressing willingness to cooperate with Congress. The actual policy stance-related content is extremely limited.

In the limited policy statements, Woor emphasizes that “low inflation is the Fed’s shield” and reiterates that ensuring price stability is its core mission. He criticizes the Fed for extending its credibility to the edge or even crossing into beyond its statutory responsibilities after the financial crisis, explicitly opposing the Fed “acting as a万能机构 for the U.S. government.”

Regarding the asset and liability sheet issue most concerning investors, Woor has previously publicly advocated for shrinking the balance sheet, believing that the large bond holdings accumulated during the crisis should be gradually sold. If implemented, this stance would directly tighten market liquidity, push up bond yields, and pressure valuations of risk assets like $BTC and $ETH. However, this key issue is completely absent from the written statement.

On the independence issue, Woor’s stance has been carefully crafted. He promises that “the implementation of monetary policy will remain strictly independent,” but adds that independence largely “depends on the Fed itself.” He believes that listening to elected officials’ opinions on interest rates does not constitute a substantial threat to independence.

Analysts interpret this as a conditional commitment: the strongest independence in monetary policy, but in other functions such as banking regulation and international finance, the Fed must remain accountable. This is seen as a political balancing act, reassuring markets while also appeasing political forces.

The most closely watched focus of the hearing is Woor’s significant shift in stance on interest rates. He has long been known for a hawkish image, but recently has publicly advocated for rate cuts. This reversal is expected to prompt questions from senators, but he did not directly respond in his testimony.

Regarding inflation, he used strong language: “Inflation is a choice, and the Fed must be responsible for it,” which is hard to interpret as dovish. He neither denied recent rate cut advocacy nor made any directional judgment on the current rate path, maintaining deliberate ambiguity.

Some market columnists have characterized this hearing as “more show than substance.” The key to whether Woor can take office depends on the political game outside the scene, not on any statement he made on stage. The market generally expects him to be confirmed smoothly.

Historical precedents show that confirmation hearings are not reliable windows for predicting future Fed policy. In Bernanke’s 2005 hearing, terms like “quantitative easing” and “balance sheet,” which later dominated his tenure, did not appear. Greenspan, a staunch opponent of the central bank’s intervention, implemented extensive intervention policies after taking office.

In his statement, Woor praised former Secretary of State George Shultz as a model. But interestingly, Shultz himself has a history of pressuring then-Fed Chairman Arthur Burns to loosen monetary policy.

For investors betting on his policy direction, especially regarding its impact on market liquidity, the real answer may only be revealed after Woor officially takes office. Until then, any bets based on his hearing remarks are fraught with risk.

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