Kevin Wash, Ketua Federal Reserve, menyetujui hitungan mundur... Tanda-tanda perubahan pasar keuangan

The confirmation process in the Senate for Federal Reserve Chair candidate Kevin Woor’s nomination is expected to accelerate due to the Republican internal opposition being essentially eliminated. The leadership change at the Federal Reserve directly relates to the direction of the U.S. benchmark interest rate and financial markets, so this development is not only closely watched in Washington politics but also treated with sensitivity on Wall Street.

Senator Tom Tillis, a member of the Senate Banking Committee and a Republican, stated on NBC on the 26th (local time) that he is ready to advance the approval process for Woor’s nomination. While evaluating Woor as suitable to serve as Fed Chair, he also said he received a clear response that the Department of Justice would not be used as a means to undermine the Fed’s independence. Previously, Senator Tillis had taken a non-cooperative stance, saying he could not cooperate with Woor’s confirmation process until the Department of Justice investigation into current Fed Chair Jerome Powell was withdrawn.

This change is significant because of the voting dynamics within the Senate Banking Committee. The committee has 24 members, consisting of 13 Republicans and 11 Democrats. If all Democrats oppose, just one Republican crossing the aisle would make it difficult for the approval to pass the committee’s threshold. In other words, Senator Tillis’s shift in stance is not merely a personal opinion change but a key variable determining whether Woor’s confirmation process can truly move forward.

The background to this is the Department of Justice’s decision to end the investigation. The DOJ had investigated Powell over excessive spending on the renovation of the Fed building, which sparked controversy. Both political circles and financial markets generally interpret this investigation as possibly aimed at pressuring Powell for not responding to former President Donald Trump’s demand for rate cuts. The Fed’s independence is central to the credibility of monetary policy because even signals of government attempts to directly influence interest rate decisions can trigger sensitive market reactions. On the 24th, three days after Woor’s confirmation hearing, the DOJ officially announced the end of the investigation.

Now, the focus has shifted to whether Powell will stay or leave. Powell’s term as Fed Chair will end on May 15, but his term as a Fed Governor will continue until January 2028. He previously stated that he would not resign during the DOJ investigation into himself. However, with the investigation ending and the path for Woor’s confirmation opening, some observers believe that he is more likely to resign from the Board of Governors when his term as Chair ends on May 15. Still, some Wall Street analysts suggest that because it cannot be completely ruled out that the DOJ investigation might restart after Powell resigns, he might also choose to remain in office. Powell himself has also expressed reservations about whether to stay on as a governor after the investigation ends, saying he has not made a decision.

The White House and Republican leadership are likely to complete the confirmation process before Powell’s term ends on May 15. If the leadership change at the Fed proceeds as planned, future debates over the U.S. interest rate policy tone and the relationship between the government and the central bank could become more intense. Especially, markets will continue to focus on how much the Fed’s independence can be maintained under the new chair system and whether interest rate decisions will be based on inflation and economic conditions rather than political schedules.