CITIC Securities: Waller may eventually take over the Federal Reserve and may trigger a reversal of "independence"

According to Foresight News , according to a report by Jinshi, CITIC Securities research reports that the Trump administration is currently selecting the next Federal Reserve Chair. We believe the core competition is between Waller and Hassett. For Trump, the two candidates are a competition between "the most suitable" and "the most obedient." Current market probabilities indicate Hassett is leading, but Trump has high trust in Bessant. We recommend paying attention to the potential difference in expectations caused by Bessant, who champions Fed independence, leading the interview process. Considering the precedent of the market "voting with their feet" and the resistance Trump faced in the Senate when appointing Milan to the board, we believe Hassett will have a hard time getting elected, while Waller is likely to prevail. This could trigger a reversal trade in the Fed's loss of independence: bullish for overall US dollar assets, bearish for gold, and likely reducing market expectations for rate cuts next year. If Hassett wins, we expect the market's muscle memory of the Fed's loss of independence to be triggered: bearish for overall US dollar assets, bullish for gold, and likely raising market expectations for rate cuts next year.