Audiência do Federal Reserve de "forma maior que substância": Wash não fala de taxas de juros, mas oferece tranquilidade ao setor de criptomoedas

Original ｜Odaily Planet Daily (@OdailyChina)

Author｜Golem (@web3_golem)



April 21, 10 PM Beijing time, Federal Reserve Chair nominee Kevin Woorh attended a Senate Banking Committee confirmation hearing, answering questions from the committee. According to the Wall Street Journal, the content involved his commitments on monetary policy, Federal Reserve independence, and more.

At the hearing, when faced with questions about Fed independence, Woorh stated he would be independent of Trump, who has never asked him to commit to any specific interest rate decision, and further defended that even if Trump had asked, he would never agree. Besides such statements, Woorh avoided answering questions related to Trump. Regarding monetary policy, Woorh criticized the Fed institutionally, believing that the Fed needs to undergo systemic reforms in policy-making, but his remarks on specific monetary policy were sparse, only mentioning that the Fed should gradually and cautiously shrink its balance sheet, without any clear indication of rate cuts.

This may also be intentional on Woorh’s part. According to an opening statement obtained early by Bloomberg, although Woorh’s prepared testimony was nearly 2000 words, far exceeding the approximately 850 to 900 words of Powell and former Chair Yellen during their initial hearings, his statements on the direction of monetary policy were almost nonexistent. Woorh’s move aligns with his consistent stance—that Fed officials should not pre-announce interest rate decisions.

But for investors paying attention to this hearing, any expectations might be disappointed. Because in terms of content and outcome, the significance of this hearing is limited. Bloomberg columnist John Authers even pre-judged it as a “show more than substance” political performance. Ultimately, whether Woorh’s nomination can smoothly pass the Senate confirmation depends on outside political negotiations, not on anything Woorh said on stage.

Stubborn Trump and Innocent Woorh

Previously, Odaily Planet Daily analyzed that the importance of this hearing lies in its potential to decide whether Powell stays or leaves after his term ends on May 15. If Woorh’s nomination is not confirmed by the Senate this time, Powell is very likely to remain as interim Fed Chair after his term expires. (Read more: Powell’s reappointment probability soars to 98%, is Trump’s “firing order” just talk?)

However, the result is that after this hearing, the market still cannot determine whether Woorh’s nomination will be confirmed as scheduled, because the main obstacle, Thom Tillis, has not even had effective dialogue with Woorh.

Thom Tillis previously publicly stated that if Trump does not abandon his investigation into Powell, he will not support Woorh’s nomination process to be transferred to the full Senate for a vote. During the April 21 hearing, Tillis did not even ask Woorh questions but instead showed slides justifying cost overruns in the Fed building renovation project. In the end, he expressed his dissatisfaction was not directed at Woorh, praising Woorh’s “extraordinary and impeccable” credentials, but said he could only support Woorh’s confirmation after ending the investigation.

Therefore, the content of the hearing no longer determines much. The key to whether Trump can finally dismiss Powell on schedule depends on whether the Senate confirms Woorh’s nomination in time, which again hinges on whether Trump is willing to give up the investigation into Powell.

On April 21, Trump also discussed the Fed and interest rate issues in a recent interview. He said he would be disappointed if the new Fed Chair (Woorh) does not cut rates quickly, but also insisted on investigating the cost overruns of the Fed building. Promoting rate cuts and investigating Powell are parallel, and Trump shows no sign of backing down.

As John Authers said, the real game occurs outside the hearing, and Woorh is even “accidentally caught in the crossfire.” Either Thom Tillis makes concessions proactively, or Woorh uses rate cuts as leverage to persuade Trump to abandon the Powell investigation and take over the Fed early. Woorh’s relationship with Trump is unusual: Woorh’s father-in-law, Ronald Steven Lauder, is the sole heir of the global cosmetics giant Estée Lauder, and he is also a Republican benefactor and Trump’s college classmate. Therefore, if Woorh truly wants to take over the Fed soon, he might be able to persuade Trump to give up the investigation.

Otherwise, if this deadlock continues until Powell’s term ends, Trump might choose to dismiss Powell to resolve the issue. As Odaily Planet Daily previously analyzed, the outcome could favor Powell. Notably, according to Odaily Seer’s monitoring, the probability of Powell leaving office after his term ends remains at 2%. But a closer look at the contract’s settlement rules shows that “if Powell resigns or is dismissed before the market’s end date, the market will immediately settle as ‘Yes’ regardless of when the resignation or dismissal takes effect.”

Market settlement rules for Powell’s potential resignation

In other words, as soon as Trump announces Powell’s dismissal, the event will be settled. Although Powell can sue to make the dismissal effective during the lawsuit, lawsuits are lengthy processes, so the rule that “regardless of when the resignation/dismissal is announced, the market will immediately settle as Yes” leaves room for manipulation. (Odaily note: The above is solely the author’s personal judgment and does not constitute any advice.)

Woorh: Digital assets are part of the US financial services industry

But for the crypto industry, this hearing still holds some significance. Previously, it was disclosed that Woorh owns cryptocurrencies, Polymarket, and SpaceX stocks, seen as a friendly attitude towards the crypto sector.

During the hearing, Woorh promised that if nominated, he would divest relevant assets before taking office when questioned about his over $100 million in disclosed assets and potential conflicts of interest. He further stated that digital assets are part of the US financial services industry, affirming the legitimacy and importance of crypto in America. Although a brief mention, the fact that someone about to hold the most powerful economic position globally declares himself crypto-friendly is definitely good news.