Powell Policy Proposal: Advocate for Simultaneous Interest Rate Cuts and Balance Sheet Reduction, Inflation is a Fed Choice
BlockBeats News, December 16: With Trump ally John Wosah appointed as the next Federal Reserve Chairman, the market's prediction probability betting on Wosah becoming the new Fed Chair has surpassed Hasset and risen to first place. The latest research report from Deutsche Bank's Matthew Luzzetti's team pointed out that if Wosah is elected as the Federal Reserve Chairman, he may support interest rate cuts while advancing balance sheet reduction (QT). However, the premise of both happening concurrently is that regulatory reform can lower the banking system's demand for reserves, with uncertainty remaining in the short term.
As a top candidate to succeed Powell, Wosah earlier this year put forward the view that "inflation is a choice," believing that inflation is not caused by the supply chain or geopolitics, but rather by the Fed's own policy decisions, calling for the Fed and the Treasury to each be responsible for interest rates and the fiscal account, with the Fed needing to reform and return to its core mission of maintaining price stability. Despite criticizing policy, he is extremely bullish on the US economic outlook, believing that AI and deregulation will bring about a productivity boom similar to that of the 1980s.
In terms of his background, Wosah is a lawyer by profession and served as a Federal Reserve Governor from 2006 to 2011, playing a key communication role during the global financial crisis. He has long criticized the Fed's aggressive balance sheet expansion policy over the past 15 years, believing that quantitative easing has deviated from the central bank's core functions. Currently, Wosah is a partner at the Druckenmiller Family Office Duquesne, as well as a distinguished visiting scholar at the Hoover Institution and a lecturer at the Stanford Graduate School of Business. His background spanning academia, regulation, and investment has given him broad influence in the field of monetary policy and financial markets. (Wall Street See News)
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