Recently, a captivating power struggle has unfolded in Washington politics, featuring the former President of the United States and the current Chair of the Federal Reserve. The focus of this game seems to be heading in an unexpected direction: Powell may be forced to resign voluntarily.

The catalyst for this turmoil was the cost overruns of the Federal Reserve building renovation project. Critics magnified this issue, accusing Powell of misconduct. Furthermore, some believe that certain ambiguous statements he made during a congressional hearing could constitute false statements. The media's sensationalism has intensified this controversy, and public pressure continues to mount.

Some observers believe that this strategy is designed to avoid complicated debates on monetary policy and instead focus on misconduct allegations that are more likely to resonate with the public. This tactic appears to aim to force Powell to resign voluntarily under immense pressure.

Currently, Powell faces a dilemma: whether to insist on defending the independence of the Federal Reserve or to choose to resign under pressure. If he ultimately decides to resign, it could cause a short-term shock to the financial markets. Bond investors are worried that the long-term bond market could spiral out of control, which may lead to rising long-term bond yields and put pressure on risk assets. However, analysts expect that the extent of this shock may be relatively limited.

If the new Federal Reserve chair nominee is confirmed, the market may interpret it as a shift in monetary policy towards dovishness. Investors may expect the Federal Reserve to be forced to cut interest rates even if the economy is not in recession. This expectation could ease market panic and drive up the prices of risk assets.

The outcome of this power struggle will have profound implications for U.S. economic policy, and global financial markets are closely watching the developments. Regardless of the result, this event highlights the delicate balance between the independence of monetary policy and political influence.