Core Viewpoint - The article highlights a significant critique from U.S. Treasury Secretary Mnuchin against the Federal Reserve, emphasizing concerns over its independence due to its expanded functions and policies [1][2]. Group 1: Criticism of the Federal Reserve - Mnuchin argues that the Federal Reserve's overreach in its responsibilities has jeopardized its credibility and political legitimacy, calling for a comprehensive review of the institution [1][2]. - He specifically points out that the excessive use of non-standard policies and the expansion of its mission threaten the core independence of the Federal Reserve [2][3]. Group 2: Call for Independent Review - Mnuchin demands an honest, independent, and non-partisan review of the entire Federal Reserve, including its monetary policy, regulation, communication, staffing, and research [2]. - This request marks a broader scope compared to his previous suggestions, which were limited to non-monetary policy functions [2]. Group 3: Regulatory Framework Restructuring - Mnuchin criticizes the Dodd-Frank Act for significantly expanding the Federal Reserve's regulatory role, blurring the lines between monetary and fiscal policy [3]. - He proposes a more coherent framework where the FDIC and OCC lead bank regulation, while the Federal Reserve focuses on macro monitoring, liquidity as a lender of last resort, and monetary policy [3]. Group 4: Monetary Policy Experimentation - Mnuchin likens the Federal Reserve's recent policy approaches to an uncontrolled experiment, suggesting that the unconventional monetary tools released post-2008 have altered the policy landscape with unpredictable consequences [4]. - He cites the Federal Reserve's failure to accurately predict GDP growth as evidence of its inadequate forecasting capabilities [4]. Group 5: Inequality and Quantitative Easing - The article discusses Mnuchin's criticism of the quantitative easing (QE) policies post-2008, arguing that they disproportionately benefited asset owners and exacerbated wealth inequality [5]. - He highlights that younger and less affluent families have been adversely affected by these policies, missing out on asset appreciation opportunities [5]. Group 6: Government Officials' Critique - Following the release of disappointing employment data, several officials from the Trump administration, including Trump himself, have blamed the Federal Reserve for the economic slowdown [6]. - Labor Secretary Lori Chavez-DeRemer and labor expert Rob Wilson echo the sentiment that the Federal Reserve's high-interest rates are hindering economic growth and job creation [6].

Group 1: Report Industry Investment Rating - There is no information provided regarding the report industry investment rating in the given content. Group 2: Core Viewpoints of the Report - The report analyzes the journey of Japanese government bonds from a 2% to 1% yield, identifying three stages of fluctuations and the factors influencing them, including policy changes, economic conditions, and institutional behaviors. It also draws lessons from Japan's experience in dealing with low - interest - rate bond market volatility for China [12][15][34]. Group 3: Summary by Directory 1. Replay: What Happened to Japanese Government Bonds from 2% to 1%? - **Stage One (1999 - 2001)**: After a period of rapid rise and recovery, the 10 - year Japanese government bond oscillated between 1.5% - 2%. Fiscal expansion and zero - interest policies rebalanced the supply - demand pattern of government bonds. Banks passively increased their government bond holdings due to low lending demand and narrow interest spreads, while bond funds' scale recovered, and the central bank started using non - traditional tools to intervene in the market [12][15][20]. - **Stage Two (2001 - 2002)**: The 10 - year Japanese government bond oscillated between 1% - 1.5%. The launch of QE and the resolution of financial institution risks were the main themes. Banks' willingness to buy government bonds weakened due to bad loan restructuring, while insurance companies increased their government bond allocation to hedge against equity risks. Public bond funds' scale shrank significantly, and capital flowed overseas [12][34][36]. - **Stage Three (2003 - 2010)**: The 10 - year Japanese government bond oscillated between 1.2% - 2%. Japan maintained low fiscal stimulus, resulting in low growth and low inflation. Fiscal and monetary policies formed a structural division, with fiscal prudence and monetary easing. During the financial crisis, the central bank's policy changes constrained interest rate fluctuations, and the bond market had large retracements in a low - interest environment [12][48][50]. 2. Experience: Bond Market Volatility and Institutional Responses in Japan's Low - Interest Environment - **Experience One (1999 - 2001)**: The Japanese banking system absorbed the supply shock of government bonds. From 1997 - 2001, the proportion of government bonds held by banks increased from 5.23% to 10.13%, digesting 28.19% of the government bond increment. In contrast, Chinese commercial banks have stronger government bond - taking capacity and greater structural adjustment space [60][62]. - **Experience Two (2001 - 2002)**: The insurance industry had greater potential for government bond allocation than banks. In 2001 - 2002, the year - on - year growth rate of insurance funds' government bond purchases increased from 28% to 57%, reaching 2.83 trillion yen in 2002. Regulatory policy relaxation also increased the industry's government bond - taking ability [67][68]. - **Experience Three (2003 - 2010)**: The fixed - income fund industry coped with the market volatility of low - interest rates and high retracements. Bond funds' passive management became popular, some funds obtained excess returns through credit screening and duration strategies, and the industry explored solutions through product innovation, such as monthly - dividend products [71][72][73].

Core Viewpoint - The upcoming selection of the next Federal Reserve Chair is becoming increasingly significant, with potential candidates including Scott Bessent, Kevin Warsh, Christopher Waller, and Judy Shelton, which may impact the Fed's independence and inflation targets [1][3]. Candidate Profiles - Christopher Waller has been a prominent figure in the Fed, advocating for a dovish stance and suggesting that tariffs will have a temporary effect on inflation, indicating a potential for interest rate cuts this year [2][3]. - Kevin Warsh, previously considered for the Fed Chair position by Trump, has criticized the Fed's quantitative easing policies and is seen as a potential candidate, although he has shown some flexibility in his recent statements regarding interest rate cuts [4][5]. - Judy Shelton, known for her controversial views advocating for a return to the gold standard and opposing Fed independence, could cause significant market volatility if nominated [6][7].