Powell's resignation and Wash's succession mark the official shift of the Federal Reserve from a crisis response mode to a "system reset." Wash's advocated reforms—reducing the balance sheet, decreasing forward guidance, strengthening coordination with the Treasury—center on shrinking the central bank's functions and returning to traditional inflation targeting. This directly contrasts with Powell's later difficult balancing act between inflation and recession.

Related signals indicate that this transfer of power has been viewed by the market as the main core trading theme for 2026 since the end of 2025. Wash's AI and fiscal discipline policy framework were previewed in April's analysis. The key point is that Powell's rare decision to stay on as a board member after the last FOMC meeting is interpreted as hedging political pressure and maintaining internal checks and balances. Currently, most officials lack support for rate cuts and are even discussing rate hikes, meaning Wash's debut will face direct conflicts between internal policy disagreements and external political expectations. His radical "system reset" proposals may be forced to compromise in practice.
BlockBeats news reports that on May 15, The New York Times reported that Federal Reserve Chair Jerome Powell is about to step down, with Kevin Wash succeeding him. This personnel change is seen as the U.S. monetary policy system entering a "re-pricing phase."
Before taking office, Wash proposed structural reforms for the Fed, including re-evaluating inflation models, shrinking the balance sheet, reducing the frequency of forward guidance, and strengthening coordination with the Treasury on government bond asset allocation. He also criticized recent Fed overreach and excessive market intervention.
The report notes that Powell's tenure experienced multiple shocks, including extreme easing during the pandemic, the subsequent highest inflation in forty years, and a tightening cycle starting in 2022 with 11 consecutive rate hikes to the 5.25%-5.5% range. Despite policy controversies, his success in lowering inflation without triggering a recession in the later part of his term is regarded as a significant policy achievement.
Wash's reform proposals have sparked disagreements on Wall Street and in academia. Some former officials believe the Fed needs to optimize its forecasting models and communication mechanisms; others argue that external political pressure is already undermining the central bank's independence, potentially leading to greater systemic risks. $BTC
{spot}(BTCUSDT)