#As the transfer of Federal Reserve Chairmanship approaches and with the passage of a key procedural vote in the Senate, Kevin Warsh's succession to Powell as Fed Chair is in the final countdown, expected to be officially sworn in on May 15. This is not only a personnel change but is also seen as a major revision of the Fed's policy logic.

The Powell era has experienced pandemic shocks and aggressive rate hikes, which have brought inflation down from high levels, but before leaving office, he faces an increasingly divided internal situation. The so-called "discipline faction" candidate, Warsh, advocates for moving away from a "crisis response" model toward a new paradigm of a "small central bank," de-regulation, and normalization of monetary policy. He favors a "cut rates + balance sheet reduction" approach, leveraging productivity gains from artificial intelligence to tolerate some rate cuts, while reducing the balance sheet to guard against inflation risks, and criticizes tools like the dot plot for over-interfering with markets.

However, Warsh's future path to governance is not smooth. On one hand, he needs to balance the demands of the Trump administration for rate cuts with the Fed's anti-inflation mission; currently, there is still considerable resistance within the committee to further rate cuts. On the other hand, the Fed's independence is under scrutiny, as a series of actions by the White House have raised market concerns that political pressure could influence central bank decisions. Additionally, although Powell has promised not to act as a "shadow chairman," his remaining as a governor until 2028 adds a subtle variable to the power transition.

Global markets have already begun to reconfigure expectations. Warsh's nomination triggered volatility in stocks, bonds, and currencies, with gold and Bitcoin experiencing significant declines. As the world's most influential central bank leader, how Warsh navigates a stable interest rate path amid a changing economic environment, while maintaining the independence of the central bank, will directly impact the dollar's trend and global capital flows.