Author: Chloe, ChainCatcher

Federal Reserve nominee Waller attended the U.S. Senate Banking Committee appointment hearing at 22:00 yesterday. This is also the first time Waller has publicly elaborated on his monetary policy views and vision for central bank governance since being nominated by Trump in January this year.

Previously, Waller submitted financial documents revealing his investments in the cryptocurrency industry. He holds shares in dozens of blockchain and digital asset companies, with investments spanning DeFi lending, decentralized derivatives, Layer 1 and Layer 2 networks, prediction markets, and even Bitcoin payment infrastructure. Now, in order to comply with government ethical standards, he has committed to divesting the vast majority of his holdings.

The significance of this hearing is self-evident; for the cryptocurrency market, every statement made by Waller could potentially influence the direction of market liquidity.

Hearing Highlights: How Waller Responded to a Series of Questions

According to previous Bloomberg reports, Trump has clearly expressed his hope that the new chair will lower interest rates. Waller undoubtedly also faces a series of questions regarding the independence of the Federal Reserve, testing whether he can appease Washington while convincing the financial market that his policy direction will be based on the true needs of the market.

At last night’s hearing, the core inquiry Waller faced was whether he could maintain independence under Trump’s pressure to lower interest rates. Waller clearly responded that Trump has never requested him to commit to lowering interest rates at any specific time, stating, “The president has never asked me to pre-decide, commit, or lock in any interest rate decision; he has not made such requests or pressured me, and I would never agree to do so.” When asked if he would become Trump’s “sock puppet,” Waller firmly denied it, stating that if confirmed, he would lead the Federal Reserve as an independent actor.

However, Democratic senators were not easily swayed. Senator Ruben Gallego pointedly noted that the Wall Street Journal had reported Trump questioned Waller about whether he could be trusted to support rate cuts during their 45-minute meeting in the White House, and Trump later confirmed this report. Gallego bluntly stated, “Someone here is lying; it’s either you or President Trump.” In response, Waller stated that the reporter of that article “either needs better sources or higher journalistic standards,” but he acknowledged that he did not request a correction and did not respond to Trump confirming the report in the Wall Street Journal.

However, on the morning of the hearing, Trump stated more directly in an interview with CNBC that if Waller-led Fed fails to lower interest rates, he would “feel disappointed,” also indicating that he does not intend to pressure the Justice Department to end the investigation into Powell. This undoubtedly added fuel to the political tension of the hearing.

The most aggressive attack came from Elizabeth Warren, the chief Democratic senator in the Senate Banking Committee. In her opening statement, she directly criticized Waller as “not suitable to serve as Fed Chair,” accusing Trump of attempting to dismantle the independence of the Fed to make monetary policy serve short-term economic prosperity ahead of the midterm elections. Warren further used the 2020 election results to test Waller (who Trump has long claimed was “manipulated”), asking him: “Did Trump lose the 2020 election?” However, Waller consistently refused to directly state “Trump lost,” instead referencing that the election results “have been certified,” trying to separate the political issue from the responsibilities of the Fed.

In terms of policy proposals, Waller categorized the current inflation predicament as a “fatal policy mistake” of the Fed, noting that prices have increased by 25% to 35% after the pandemic, indicating a serious misalignment from the Fed. He called for “regime change,” including the establishment of a new inflation framework, reforming communication methods, and utilizing both interest rates and balance sheets to address inflation. However, he clarified that the so-called regime change refers to “the change of the policy system,” not personnel purges, and he clearly stated he would not fire any regional Fed bank presidents.

At the same time, Waller expressed dissatisfaction with the practice of Fed officials predicting the direction of interest rates in advance, stating, “Too many Fed officials have prematurely commented on the direction of interest rates for the next meeting, next quarter, or even next year; I think this is quite unhelpful.” He prefers to have “full and vigorous internal debates” during policy meetings rather than following a rehearsed script. Notably, Waller did not commit to maintaining the current practice of holding press conferences after every FOMC meeting, which means that the transparency of the Fed’s policies may experience subtle changes in the future.

In terms of timing, although Republican Senator Thom Tillis clearly stated his support for Waller as chair, he still insisted that the nomination would not pass until the Justice Department investigation into Powell concludes. He called during the hearing, “Let’s end this investigation so that I can support your confirmation.”

However, the hearing also revealed signs that some Democratic senators might support Waller. Senator Catherine Cortez Masto responded positively after Waller discussed re-examining measurement methods for inflation, stating, “I hope you are right,” and remarked that she respects his theoretical beliefs as an economist. Senator Mark Warner did not attend the hearing due to a family bereavement; he is also viewed as a potential supporting vote.

What Does This Mean for the Cryptocurrency Market?

For the cryptocurrency market, the significance of this hearing lies not only in the future path of interest rates and dollar liquidity but also in how the Federal Reserve and banking regulatory system will confront the deeper embedding of crypto capital into traditional finance.

Notably, although Waller repeatedly emphasized that monetary policy must remain independent during the hearing, he was unwilling to extend the same standard to banking policy and regulatory areas. This prompted strong questioning from Warren: In the context where Trump’s family has extended into the system through cryptocurrency financial businesses like World Liberty Financial and even applied for a bank license, in the future, if it involves discount windows, bank admission, or regulatory discretion, could the Fed face direct pressure from the commercial interests of the president's family?

Previously, Waller had also explicitly proposed to significantly reduce the Fed's $6.7 trillion balance sheet, but so far has not disclosed specific implementation plans. Multiple officials and scholars have warned him not to be too aggressive or hurried. The pace and scale of the balance sheet reduction will directly affect market liquidity, which is one of the core variables in pricing crypto assets.

Moreover, Waller himself has a wide range of investment in the digital asset field. According to his regulatory filing, Waller's investment portfolio includes stakes in multiple companies in the decentralized finance sector, including projects like Solana, Lemon Cash, and Flashnet, as well as other funds with cryptocurrency exposure. According to Federal Reserve trading rules, officials cannot hold large cryptocurrency positions, so if Waller officially takes office, these holdings must be divested.

It can be inferred that a Federal Reserve chair deeply invested in the cryptocurrency industry, regardless of whether their tenure will directly affect digital asset regulation, at least means that the decision-makers are not unfamiliar with this emerging asset class. Combined with Waller's inclination towards deregulation and his ambition to reshape the Fed's economic model and communication framework, the cryptocurrency market has reason to hold cautious optimism towards this potential new chair.

Finally, although this hearing superficially focused on the independence of the Fed, it actually represents a direct confrontation regarding the boundaries of power between the White House, Congress, and the central bank. Waller displayed very political tactics during the hearing, neither openly opposing Trump nor reassuring the market by repeatedly emphasizing independent decision-making. However, he avoided addressing the 2020 election results and refused to commit to maintaining the frequency of press conferences, leaving ambiguous space for his “independence” commitment.

With multiple senators obstructing, whether Waller can formally succeed before Powell's term expires on May 15 will depend on the trajectory of the Justice Department investigation, and Trump has made it clear that he has no intention of backing down. Regardless of the final timeline, the policy direction represented by Waller is already clear: a new era of the Federal Reserve leaning more towards a narrative of productivity to pave the way for interest rate cuts, promoting the “slimming down” of the central bank and institutional reform, is brewing. For the cryptocurrency market, the macro narrative framework in the next four years may undergo a significant change.

免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。