At 11 p.m. Beijing time on May 22, Trump will preside over the swearing-in ceremony of the new Federal Reserve Chair Kevin Wirth in the East Room of the White House, breaking a nearly 40-year tradition. On May 13, Wirth's appointment was approved by a party-line vote in the Senate, and at 56 years old, he will begin a four-year term as Fed Chair and a fourteen-year term as a board member, succeeding Powell as head of the Federal Reserve, while Powell will remain a board member until January 2028.

The core focus of this personnel change is the shift in monetary policy expectations. Wirth has consistently advocated for balance sheet reduction combined with interest rate cuts, which offsets the Fed's current inclination to raise rates to combat inflation, and this was a key reason for Trump's appointment of him. Currently, U.S. inflation pressures have significantly increased, with April's CPI posting the largest three-year increase and PPI experiencing the largest monthly rise since 2022. The Fed has not achieved its 2% inflation target in over five years. The April Federal Open Market Committee (FOMC) minutes show that most officials support tightening policies when inflation is high, with market expectations of an 84% chance of a rate hike next, but there is significant disagreement within the Fed, with four dissenting votes that month—the most severe internal split since 1992.
Wirth's political connections have sparked strong doubts about his policy independence. He has close ties to Trump; his father-in-law is Ronald Lauder, a long-time Trump ally and honorary chairman of Estée Lauder. Although Wirth stated at a Senate hearing that he would not be influenced by politics and would maintain Fed independence, Democrats questioned him, calling him a "puppet" of Trump. The White House claims this personnel change will restore public confidence in Fed decision-making, and Trump's recent attitude has softened, saying he will not interfere with Wirth's decisions.
In terms of market impact, historical data shows that the stock market generally weakens on the first day of a new Fed chair's tenure, with the S&P 500 averaging a return of -0.29%. Both Powell and Yellen experienced significant declines on their first day in office. However, the market generally believes that, compared to the inauguration ceremony, oil price fluctuations and corporate earnings are the core factors influencing the short-term market.
Additionally, Wirth will take over the Fed's $6.7 trillion balance sheet. He has previously criticized mechanisms like the dot plot and press conferences, arguing they are easily manipulated by market expectations and constrain policy decisions. Meanwhile, the Fed is undergoing personnel adjustments, with Board member Stephen Miran set to resign. Previously, due to controversy over the Fed headquarters renovation investigation, senators delayed his nomination, indirectly extending Powell's term as Chair.