Core Viewpoint - The recent announcement by the Trump administration to initiate the selection process for the next Federal Reserve Chair has caused significant market volatility, raising concerns about the independence of the Federal Reserve and its implications for the financial system [1][3]. Group 1: Federal Reserve Chair Selection - Jerome Powell's term as Chair of the Federal Reserve is set to end in May 2026, and the Supreme Court has ruled that the President cannot dismiss the Fed Chair [3]. - Kevin Hassett has shifted from supporting Fed independence to becoming one of Powell's harshest critics, suggesting immediate interest rate cuts, making him a potential candidate favored by Trump [3][4]. - Kevin Warsh, a former Fed governor, has a complex history with Trump but has recently criticized the Fed's handling of inflation, which may influence his candidacy [4]. Group 2: Regulatory Changes and Candidates - Current Fed Governor Michelle Bowman, recently nominated as Vice Chair for supervision, is pushing for regulatory reforms that align with Trump's agenda of easing bank regulations, positioning her as a dark horse candidate [5]. - The power struggle surrounding the Fed's leadership is seen as a critical battle for the global financial order, with warnings that political interference could undermine the credibility of the dollar and the stability of the U.S. Treasury market [5]. Group 3: Market Signals and Implications - Investors should monitor personnel nomination trends around September, as a dovish candidate could lead to a long-term depreciation of the dollar, benefiting commodities like gold and oil [6]. - The 10-year Treasury yield is a key indicator; a breakout above 4.8% could pressure global risk assets, particularly high-valuation tech stocks [6]. - The internal debate within the Fed regarding interest rate policies could lead to increased market volatility, with significant divisions among officials on whether to cut rates [6].