Trump's "designated" new Fed chief, how will the independence and rate-cutting争争 reshape the future of the crypto world?

Kevin Wash, praised by Trump on social media as "one of the greatest chairmen in Federal Reserve history," has officially been nominated as the next Federal Reserve Chairman, while current Chairman Powell faces a criminal investigation over office building renovation projects.
Trump announced on the "Real Social" platform: "I nominate Kevin Wash as Chairman of the Federal Reserve System. I have known Kevin for a long time, and there is no doubt he will be a great Fed Chairman, perhaps the best one."
This nomination did not come out of nowhere. As early as 2017, Wash competed with Powell for the Fed Chair position, with Powell ultimately winning. This time, Trump has chosen a different path.
Powell's term will end in May this year. In the final months of his term, he also faces a criminal investigation—related to the Fed office building renovation project, and he is accused of possibly making false statements to Congress about the project's scale.
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01 Political Confrontation
A political drama over the Fed Chair nomination is unfolding in Washington. Current Chair Jerome Powell's term will end in mid-May, and Trump's choice almost inevitably fell on Kevin Wash.
Wash is not an outsider in politics; he has close ties to Trump. His father-in-law, Ronald Lauder, is the heir to Estée Lauder and a longtime friend of Trump for over 60 years.
This relationship played a role during Trump's first term when Lauder suggested purchasing Greenland, which later escalated into an international issue.
Powell's days are not easy. In January, U.S. federal prosecutors launched a criminal investigation into Powell, mainly concerning the Fed office building renovation project and whether Powell made false statements to Congress about the project's scale.
Powell directly attributed the investigation to the Fed "not following the President's wishes" in setting interest rates.

02 Wash's Victory
Wash's background and resume are highly impressive within the financial circle. Born in 1970, he was the youngest Fed Governor in history, with a career spanning politics, business, and academia.
He started his career on Wall Street, working at Morgan Stanley from 1995 to 2002, quickly rising to Managing Director of the Mergers & Acquisitions Department. From 2002 to 2006, Wash entered the George W. Bush administration, serving as a special assistant for presidential economic policy and other roles.
Wash's connection to the digital asset field is closer than many imagine. According to Barron’s, Wash has known Silicon Valley investors Peter Thiel and venture capitalist Marc Andreessen since college.
It was these two who introduced Wash and his partner Drukenmiller to early Bitcoin investments.
Comparison of policy positions between Wash and Powell:
Monetary Policy
· Kevin Wash: Traditional hawk, criticized quantitative easing; in recent years, shifted to support rate cuts. Advocates shrinking the balance sheet.
· Powell: Considered overly cautious on rate cuts, criticized by Trump as "Mr. Too-Late."
On Cryptocurrency
· Kevin Wash: Early Bitcoin investor; calls for increased regulation, but background shows understanding of digital assets.
· Powell: No specific stance on cryptocurrencies mentioned in search results.
Relationship with Trump
· Kevin Wash: Father-in-law is a Trump friend; supports Trump's tariff policies.
· Powell: Nominated by Trump, but relationship has soured; publicly criticized by Trump.
Crisis Management Experience
· Kevin Wash: Served as Fed-Wall Street liaison during the 2008 financial crisis.
· Powell: Led the Fed through the pandemic economic shock.

03 Independence争争
The independence of the Federal Reserve is facing unprecedented challenges. Powell explicitly advised his successor at the January 28 press conference: "Don't get involved in election politics. Don't do it."
He emphasized that if the central bank loses independence, it will be difficult to restore.
Trump has made it clear that he wants the next Fed Chair to consult him on interest rate policies. He hopes the federal funds rate will be lowered to "1% or even lower" within a year to help the U.S. Treasury reduce the high costs of debt financing.
Wash recently changed his views on trade policies, now supporting Trump's tariffs. He also wrote in a Wall Street Journal column: "The strong deregulation policies of the Trump administration, if implemented, will be anti-inflationary."

04 Market Outlook
Wash faces a complex situation with few modern precedents. He needs to assess the impact of Trump's reshaping of the global trade landscape and how AI will change productivity and the labor market.
The rise of digital assets could disrupt the Fed's regulatory framework for banking. Wash plans to prioritize reforming the Fed's $6.6 trillion asset portfolio, believing this scale is too large and should involve a new agreement with the Treasury to reduce the central bank's influence in the money markets.
In monetary policy, Wash shows some flexibility. Although he was a strong opponent of quantitative easing and held hawkish views, he has recently begun supporting rate reductions.
He also stated that the role of the Fed is becoming broader, with a "drift" in institutional functions, and should refocus on its core mandate—maintaining price stability.

05 Senate Battle
Wash's nomination still requires Senate approval, which may not be smooth. Republican Senators Tom Tillis and Lisa Murkowski have vowed to oppose any Fed nominee from Trump as long as the Justice Department is investigating the Fed and Powell.
Tillis, leveraging his position on the Senate Banking Committee, could hinder Trump's Fed nominations from being approved.
The Supreme Court is reviewing a case where Fed Board Member Lisa Cook is suing Trump for attempting to remove her from office. If the Supreme Court rules against Cook, Trump could gain the power to dismiss Fed Board members and replace them with sympathetic appointees, giving him unprecedented control over the central bank.
In digital asset regulation, Wash has called for increased oversight of private cryptocurrencies in recent years, but this stance faces strong resistance within the Republican Party. This position contrasts with his early involvement in Bitcoin investments.
Following Wash's nomination announcement, market reactions are worth noting. On January 12, when Powell confirmed receiving a Justice Department subpoena, the dollar index fell to 98.82, down over 0.3%.
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Wash's nomination has attracted significant market attention. Before the announcement, prediction markets like Polymarket showed Wash's chances of being nominated had soared to 87%.
Bitcoin recently surged to $4,601.38 per ounce, hitting a new all-time high. This is driven by rising global risk aversion and closely related to the dollar's movement.
If Wash accelerates rate cuts after taking office, the dollar could weaken further, bringing more liquidity to the cryptocurrency market.