Core Viewpoint - Kevin Warsh has been nominated by Trump as the next Federal Reserve Chairman, aiming to balance various interests and potentially replace Jerome Powell on May 16, 2026 [1][3]. Group 1: Nomination Process - Warsh was chosen over other candidates due to his ability to unify different factions within the Republican Party and his strong connections with CEOs, financial giants, and politicians [1][7]. - Other candidates included Kevin Hassett, Rick Rieder, and Christopher Waller, each facing significant disadvantages compared to Warsh [4][8]. Group 2: Policy Philosophy - Warsh emphasizes that controlling inflation is the core mission of the Federal Reserve, advocating for balance sheet reduction and normalization of monetary policy [1][10]. - He believes that AI will drive the U.S. economy towards a "Goldilocks" scenario of high growth and low inflation, creating room for interest rate cuts [1][18]. - Warsh supports deregulation of U.S. commercial banks and aims to collaborate with regulatory vice-chair Bowman to advance this agenda [1][27]. Group 3: Long-term Policy Goals - Warsh's long-term strategy focuses on reviving monetarism, with deregulation and balance sheet reduction as core components [2][32]. - He may work with Treasury Secretary Bessent to implement "small central bank + small fiscal" reforms, aiming to achieve "growth with balance sheet reduction" [2][42]. Group 4: Market Implications - The global market may experience increased volatility, with U.S. stocks expected to trend upward but face a bumpy path [2][47]. - The U.S. Treasury yield is anticipated to decline moderately, with recommendations to focus on 2-5 year maturity bonds [2][56]. - The dollar is expected to initially weaken before strengthening, while the yuan is projected to appreciate moderately [2][62]. Group 5: Short-term Outlook - The Federal Reserve is likely to continue its interest rate cuts, with expectations of 2-3 cuts of 25 basis points each, potentially lowering the policy rate to 2.75-3.0% [1][36]. - Warsh's influence on short-term policy may be limited, but the dovish stance is expected to prevail [32][34].

Core Viewpoint - Kevin Warsh has been nominated by Trump as the next Federal Reserve Chairman, aiming to balance various interests and embody a consensus on monetary policy [2][12]. Group 1: Warsh's Policy Stance - Warsh emphasizes that controlling inflation is the core mission of the Federal Reserve, advocating for balance sheet reduction and normalization of monetary policy [3][16]. - He supports a reduction in the Fed's balance sheet and a focus on stabilizing inflation, while also calling for deregulation of U.S. commercial banks [3][30]. - Warsh's long-term goal is to revive monetarism, with deregulation and balance sheet reduction as key strategies [3][44]. Group 2: Economic Outlook and Interest Rates - The Fed is expected to continue a rate-cutting cycle, with 2-3 rate cuts of 25 basis points anticipated this year, potentially lowering the policy rate to a range of 2.75-3.0% [3][40]. - Warsh believes that AI-driven productivity improvements could allow for high growth and low inflation to coexist, creating space for rate cuts [3][22]. - The potential for a "quiet" monetary policy approach is suggested, where the Fed reduces its communication and market influence, which may increase market volatility [3][26]. Group 3: Regulatory Changes and Market Impact - Warsh advocates for a shift towards deregulation in the banking sector to enhance credit availability, particularly in light of the ongoing AI-driven economic transformation [3][30]. - The article outlines three potential scenarios for Warsh's reforms: optimistic, neutral, and pessimistic, each with varying implications for fiscal policy and credit expansion [4][49]. - Market volatility is expected to increase, with the potential for significant fluctuations in asset prices as the Fed's policy direction becomes clearer under Warsh's leadership [50][51]. Group 4: Long-term Implications - Warsh's approach may lead to a revival of monetarist principles, focusing on controlling money supply and stabilizing prices, which could reshape the Fed's monetary policy framework [44][68]. - The article suggests that the Fed's balance sheet reduction could lead to a steepening yield curve, impacting long-term interest rates [54][65]. - The potential for increased dollar credibility and a more hawkish liquidity management approach under Warsh is highlighted, which may support the dollar's long-term trajectory [68].

Summary of Key Points from the Conference Call Company/Industry Involved - The discussion primarily revolves around the Federal Reserve and its new chairman nominee, Kevin Walsh, along with the implications for various financial markets and sectors. Core Insights and Arguments 1. **Market Reactions to Walsh's Nomination**: - The nomination of Kevin Walsh has led to significant volatility in precious metals markets, with gold volatility reaching a near 50-year high. This is attributed to his opposition to quantitative easing (QE) and advocacy for balance sheet reduction, which contrasts with current market expectations of dollar depreciation [1][8]. 2. **Walsh's Policy Stance**: - Walsh's monetary policy approach is rooted in monetarism, advocating for reduced intervention by the Federal Reserve in market and fiscal policies. This is expected to strengthen the dollar and steepen the U.S. Treasury yield curve, benefiting bank stocks [1][2]. - He has criticized the Fed's reliance on economic data and forward guidance, suggesting a return to core responsibilities and a reduction in the Fed's power and asset size [1][4]. 3. **Proposed Reforms**: - Walsh has proposed several reforms, including limiting data dependency, reducing the balance sheet size, promoting financial liberalization, supporting digital currency development, and enhancing coordination between fiscal and monetary policies [1][5][10]. 4. **Inflation and Interest Rate Outlook**: - Walsh has expressed concerns over uncontrolled inflation and the Fed's failure to maintain financial stability, particularly highlighted during recent bank failures. He suggests that interest rates may need to be lowered soon due to current negative CPI data indicating high rates [2][11]. 5. **Impact on Financial Markets**: - The anticipated policies under Walsh could lead to a steepening of the yield curve, a stronger dollar, and a rise in bank stocks due to his stance on financial liberalization and potential reduction in capital requirements for banks [8][9]. 6. **AI's Role in Economic Productivity**: - AI investments are noted to significantly enhance U.S. productivity, although job growth remains lagging. Walsh's familiarity with AI technology may bring fresh perspectives to the Fed, potentially improving productivity further [3][12]. 7. **Challenges Facing the Fed**: - The Fed is currently facing internal divisions and challenges related to data accuracy and macroeconomic forecasting, which complicate the decision-making process. Walsh's leadership may address these issues by emphasizing accountability and clearer communication with the public [4][6]. 8. **Global Asset Allocation Trends**: - There is an increasing interest in Chinese assets among Wall Street investors, driven by improved U.S.-China relations and the performance of emerging markets. This shift may lead to capital inflows into China, particularly if Indian markets underperform [3][18]. Other Important but Possibly Overlooked Content 1. **Long-term Economic Outlook**: - The U.S. economy is currently performing well on a macro level, but micro-level adjustments are necessary due to the disruptive impact of AI on various industries. The transition to an AI-driven economy is expected to continue reshaping traditional sectors [13]. 2. **Future of Inflation and Interest Rates**: - The outlook for inflation suggests a potential long-term deflationary trend, with the Fed likely to focus on service sector prices when determining future interest rate strategies [16]. 3. **Dollar and Yuan Exchange Rate Dynamics**: - The strong dollar policy may be reinforced under Walsh, but the yuan's stability will be more influenced by U.S.-China political relations rather than solely economic factors [17]. 4. **Investment Sentiment in Commodities**: - While gold is expected to remain a strong investment in the medium to long term, the outlook for other commodities like oil is less favorable due to oversupply and pressures from the energy transition [19]. 5. **AI Stock Investment Caution**: - Despite recent declines in AI-related stocks, the demand for AI infrastructure remains robust, indicating a need for cautious investment strategies that balance opportunity with risk management [20].

Report Industry Investment Rating - Not provided in the given content Core Viewpoints of the Report - Trump-nominated next Fed Chair Wash has monetary - policy characteristics including monetarism, fiscal hawkishness, and a "vision" of rate cuts. If Wash takes office, he may review past Fed policies and establish a monetarist - like policy concept. The realization of his rate - cut "vision" depends on the coordination of fiscal policy. If the coordination fails, the interest - rate outlook may be more volatile. If the coordination is successful, the Fed may gradually shrink its balance sheet, and inflation may further decline [3]. - Upstream price indicators continue to rise. In the week of February 6, the average wholesale price of pork decreased by 1.12% week - on - week, the average wholesale price of 28 key - monitored vegetables decreased by 1.46% week - on - week, and the price index of edible agricultural products increased by 0.20% week - on - week on January 30. Domestic cement price index decreased by 0.52% week - on - week, South China Iron Ore Index decreased by 1.89% week - on - week, the operating rate of coking enterprises with a capacity of over 2 million tons increased by 0.18% week - on - week, the inventory index of rebar increased by 12.05% week - on - week, and the blast - furnace operating rate of 247 domestic steel mills increased by 0.67% week - on - week. The price index of production materials increased by 0.90% week - on - week on January 30 [3]. - In the US - Iran negotiations, tough stances and opportunities for easing are intertwined. In this week, the average prices of Brent and WTI crude - oil futures decreased by 1.25% and increased by 0.15% week - on - week respectively. The average weekly price of LME copper spot decreased by 1.79%, the average weekly price of aluminum spot decreased by 4.99%, and the copper - to - gold ratio increased by 3.93% week - on - week [3]. Summary by Directory High - Frequency Data Scanning - Wash's policy concept features include monetarism, fiscal hawkishness, and a rate - cut "vision". The realization of the rate - cut "vision" depends on the coordination of fiscal policy [1][3]. - Upstream price indicators: In the week of February 6, the average wholesale price of pork decreased by 1.12% week - on - week, the average wholesale price of 28 key - monitored vegetables decreased by 1.46% week - on - week, and the price index of edible agricultural products increased by 0.20% week - on - week on January 30. Domestic cement price index decreased by 0.52% week - on - week, South China Iron Ore Index decreased by 1.89% week - on - week, the operating rate of coking enterprises with a capacity of over 2 million tons increased by 0.18% week - on - week, the inventory index of rebar increased by 12.05% week - on - week, and the blast - furnace operating rate of 247 domestic steel mills increased by 0.67% week - on - week. The price index of production materials increased by 0.90% week - on - week on January 30 [3]. - US - Iran negotiations: In this week, the average prices of Brent and WTI crude - oil futures decreased by 1.25% and increased by 0.15% week - on - week respectively. The average weekly price of LME copper spot decreased by 1.79%, the average weekly price of aluminum spot decreased by 4.99%, and the copper - to - gold ratio increased by 3.93% week - on - week [3]. High - Frequency Data Panoramic Scanning - Provides week - on - week changes of various high - frequency data, including food, other consumer goods, bulk commodities, energy, non - ferrous metals, ferrous metals, real estate, and shipping. For example, the average wholesale price of pork decreased by 1.12% week - on - week, and the price index of production materials increased by 0.90% week - on - week [17]. - Presents the latest values and historical data of high - frequency indicators related to important macro - indicators, such as LME copper spot settlement price year - on - year, crude - steel daily output year - on - year, etc. [18]. Comparison of High - Frequency Data and Important Macro - Indicator Trends - Shows the relationship between high - frequency data and important macro - indicators through multiple charts, such as the relationship between RJ/CRB price index year - on - year and export amount year - on - year, and the relationship between production materials price index year - on - year and PPI industrial year - on - year [22]. Important High - Frequency Indicators in the US, Europe, and Japan - Displays the relationship between US weekly economic indicators and actual economic growth rate, US initial jobless claims and unemployment rate, etc. through charts [87]. Seasonal Trends of High - Frequency Data - Analyzes the seasonal trends of high - frequency data, including the seasonal trends of 30 large - and medium - sized cities' commercial - housing transaction area, LME copper spot settlement price, etc. [102]. High - Frequency Traffic Data in Beijing, Shanghai, Guangzhou, and Shenzhen - Presents the year - on - year changes of subway passenger volume in Beijing, Shanghai, Guangzhou, and Shenzhen [149].

Core Viewpoint - Kevin Walsh has been nominated by President Trump to be the next Chairman of the Federal Reserve, pending Senate approval, amidst a backdrop of significant pressure on the Fed to lower borrowing costs [1][3]. Group 1: Nomination Details - Trump's announcement on the evening of the 29th led to a surge in market expectations for Walsh's nomination, with prediction platform Polymarket showing a probability of 93% for Walsh being named [1]. - The nomination comes after a period of speculation involving several candidates, including Kevin Hassett, Christopher Waller, and Rick Rieder [1]. Group 2: Kevin Walsh's Background - Walsh, born in 1970, is a Stanford graduate and holds a law degree from Harvard. He has served as a partner at Duquesne Family Office and as a visiting scholar at Stanford [3]. - He previously held roles in the Bush administration and was appointed to the Federal Reserve Board in 2006, becoming the youngest member in its history [3][4]. Group 3: Criticism of the Federal Reserve - Walsh has been a vocal critic of the Federal Reserve, arguing that the causes of high inflation in the U.S. stem from the Fed's policy mistakes rather than external factors [3][4]. - He believes the Fed's role has expanded excessively, which undermines the independence of monetary policy, and has called for a return to its original boundaries post-crisis [4]. Group 4: Alignment with Trump's Policies - Trump's choice of Walsh is seen as strategic, as Walsh's recent views align closely with Trump's push for lower interest rates, contrasting with his previous hawkish stance [6][8]. - Walsh's background in the Fed is expected to facilitate a smoother confirmation process in Congress, especially given the current scrutiny of the incumbent chairman [8]. Group 5: Potential Policy Implications - Analysts suggest that if Walsh is confirmed, his policy approach may involve a unique combination of lowering interest rates while simultaneously reducing the Fed's balance sheet, although the feasibility of this strategy remains uncertain [8].

Core Viewpoint - Kevin Walsh has been nominated by President Trump to be the next Chairman of the Federal Reserve, pending Senate approval. This nomination comes at a critical time for the Fed, which is under pressure to lower borrowing costs significantly [1][3]. Group 1: Nomination Details - Trump's announcement on the evening of the 29th led to a surge in market expectations for Walsh's nomination, with the probability reaching 93% according to Polymarket [1]. - Walsh was previously considered for the position in 2017 but lost to Jerome Powell. Trump has expressed regret over not selecting Walsh at that time [6][8]. Group 2: Background of Kevin Walsh - Walsh, born in 1970, holds a bachelor's degree from Stanford University and a law degree from Harvard. He has served in various roles, including as a special assistant to President George W. Bush and as a member of the Federal Reserve Board from 2006 to 2011 [3][4]. - After leaving the Fed, Walsh became a critic of its policies, particularly regarding inflation, which he attributes to the Fed's policy mistakes rather than external factors [3][4]. Group 3: Criticism of the Federal Reserve - Walsh criticizes the Fed for expanding its role beyond monetary policy, which he believes undermines its independence. He argues that the Fed's balance sheet, which has grown to $7 trillion, distorts the market [4]. - He advocates for the Fed to return to its original boundaries post-crisis and has expressed concerns about the implications of continued quantitative easing [4][8]. Group 4: Alignment with Trump's Policies - Walsh's recent alignment with Trump's calls for lower interest rates marks a shift from his previous hawkish stance during his tenure at the Fed [8]. - His selection is seen as a strategic move to facilitate a smoother confirmation process in Congress, especially given the ongoing scrutiny of Powell [8].

Group 1 - The core point of the article is the nomination of Kevin Walsh as the next Chairman of the Federal Reserve by President Trump, which requires Senate approval [1][3]. - The market's expectation for Walsh's nomination surged, with a probability of 93% according to Polymarket [1]. - Walsh has a background in economics and previously served as a Federal Reserve Governor, where he was known for his critical stance on the Fed's policies [3][4]. Group 2 - Walsh's criticisms of the Federal Reserve include its expanding role in governance and social values, which he believes undermines the independence of monetary policy [4]. - He argues that the Fed's balance sheet, which has grown to $7 trillion, distorts the market and should revert to its original boundaries post-crisis [4]. - Trump's choice of Walsh aligns with his recent policy positions, including support for lower interest rates, contrasting with Walsh's previous hawkish reputation [8]. Group 3 - Trump's previous consideration of Walsh for the Fed chair position indicates a long-standing recognition of his capabilities, despite initially choosing Jerome Powell [6][8]. - Walsh's alignment with Trump's economic policies may facilitate a smoother confirmation process in Congress, especially given the current scrutiny of Powell [8]. - Deutsche Bank suggests that if Walsh is appointed, his policy approach may involve a unique combination of interest rate cuts and balance sheet reduction, although the feasibility of this is uncertain [8].

Core Viewpoint - The nomination of Waller as the new Federal Reserve Chair by Trump is expected to have limited impact on the Fed's monetary easing path, with the likelihood of maintaining interest rates steady in the first half of the year and potential rate cuts in the second half [1][8]. Group 1: Nomination and Background - Trump's nomination of Waller reflects a cautious dovish stance, with a high probability of keeping rates unchanged in the first half of the year and possibly cutting rates twice in the second half [1]. - Waller has a diverse background across politics, business, and academia, which may enhance market confidence in his leadership [4]. - The nomination process faced delays, with multiple candidates being considered before Waller was ultimately selected [2][3]. Group 2: Policy Proposals - Waller advocates for a combination of interest rate cuts and balance sheet reduction, aligning with Trump's policy preferences [4][5]. - He believes inflation is primarily a monetary phenomenon and criticizes the Fed's excessive balance sheet expansion, suggesting a return to conventional monetary policy tools [5][6]. - Waller's approach to interest rate cuts is expected to be gradual, as he acknowledges the need to balance inflation concerns with economic growth [5][6]. Group 3: Market Reactions and Asset Trends - Following Waller's nomination, there was volatility in U.S. equities and bonds, with the dollar strengthening and gold prices declining [8]. - The market anticipates that major assets will revert to economic fundamentals, with U.S. stocks likely to continue rising and bond yields having limited downward space [9]. - The dollar index is expected to remain weak overall, while gold may experience upward pressure due to geopolitical risks and ongoing uncertainties [10].

宏 观 简 评 [证券分析师 Table_Authors] 刘思佳 S0630516080002 liusj@longone.com.cn 联系人 邓尧天 dytian@longone.com.cn [Table_Reportdate] 2026年02月04日 [对"沃什鹰派"的一些不同的观点 Table_NewTitle] ——海外观察：美国经济热点简评 [table_main] 投资要点 矛盾点一：从"数据模型的不信赖"到"以市场价格稳定为信号灯"。沃什在2014年指 责美联储对DSGE/FRB-US模型的过度依赖，认为模型数据过于滞后并严重低估金融脆 弱性，更应关注市场本身；在2025年再次指出美联储对"大幅修正的政府数据"过度依 赖，决策滞后过多。沃什主张的"货币主义"或导致美联储后续更倾向于观察市场价格 以及高频信息，或以金融指标、市场价格、企业银行资产负债表等作为美联储的信号灯， 同时强调美联储的政策边界，尽量减少美联储给出的前瞻指引。但是其主张的根本矛盾 在于，当前市场的波动依然严重依赖于美国经济数据，美联储作为市场锚定的明灯，如 果其对数据模型给予否定，短期情况下可能令市场震荡加剧，长期情况下 ...

[Table_Reportdate] 2026年02月04日 宏 观 简 评 [证券分析师 Table_Authors] 刘思佳 S0630516080002 liusj@longone.com.cn 联系人 邓尧天 dytian@longone.com.cn [对"沃什鹰派"的一些不同的观点 Table_NewTitle] ——海外观察：美国经济热点简评 [table_main] 投资要点 矛盾点一：从"数据模型的不信赖"到"以市场价格稳定为信号灯"。沃什在2014年指 责美联储对DSGE/FRB-US模型的过度依赖，认为模型数据过于滞后并严重低估金融脆 弱性，更应关注市场本身；在2025年再次指出美联储对"大幅修正的政府数据"过度依 赖，决策滞后过多。沃什主张的"货币主义"或导致美联储后续更倾向于观察市场价格 以及高频信息，或以金融指标、市场价格、企业银行资产负债表等作为美联储的信号灯， 同时强调美联储的政策边界，尽量减少美联储给出的前瞻指引。但是其主张的根本矛盾 在于，当前市场的波动依然严重依赖于美国经济数据，美联储作为市场锚定的明灯，如 果其对数据模型给予否定，短期情况下可能令市场震荡加剧，长期情况下 ...