Just now! The Federal Reserve's overnight change, Powell's countdown, has Trump's sickle already pointing at the crypto market?

The U.S. Senate confirmed Waller as a Federal Reserve Board member on Tuesday, with a 14-year term. This move paves the way for him to succeed Powell. As early as Wednesday, the Senate will vote on Waller’s nomination for Chair of the Federal Reserve. Powell’s term as chair expires this Friday.

The timing of Waller taking over the Fed is very delicate. The Trump administration has been exerting continuous pressure, demanding rate cuts; oil prices have been climbing since the outbreak of tensions with Iran, and inflationary pressures are returning. Market expectations for rate cuts this year have already significantly narrowed.

Currently, the financial market pricing suggests about a one-in-three chance of a rate hike before December. The Fed’s current short-term interest rate target range is 3.50% to 3.75%. The rate hike threat hangs over risk assets.

Trump’s impact on the Fed’s independence is unprecedented. He attempted to dismiss Fed Governor Lisa Cook, a case that has reached the Supreme Court. The Department of Justice also investigated a renovation project led by Powell, which a federal judge believed was a pretext—aimed at forcing Powell to cut rates or resign. The DOJ later dropped the case, but Washington’s chief prosecutor said they do not rule out restarting the investigation.

How will Powell respond? He announced a rare move: after his term as chair ends, he will remain on the Board of Governors. The official reason is to respond to “a series of legal attacks threatening the Fed’s ability to conduct monetary policy free from political interference.”

Who is Waller? A lawyer and financier who previously served as a Fed governor. He has signaled clearly that he aims to push for a “policy shift.” The core goals are twofold—strengthening coordination between the Fed, the Treasury Department, and the Trump administration outside of monetary policy, and shrinking the balance sheet.

His logic is: shrinking the balance sheet can create room for rate cuts. Note this chain: balance sheet reduction → room for rate cuts. But shrinking the balance sheet essentially withdraws liquidity, which is short-term bearish for stocks and crypto markets.

A detail: the Fed chair has only one vote in the FOMC’s 12-member rate decision. Waller is one of 19 policymakers. According to the schedule, the next Fed meeting is on June 16-17, and Waller is likely to preside for the first time.

For those trading $BTC and $ETH, this is not good news. A chair aiming to shrink the balance sheet, combined with Trump’s pressure for rate cuts, rising inflation, and war premiums—expectations of liquidity tightening are accelerating to materialize.

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