The policy showdown between the Federal Reserve Chair and the President is becoming a key variable in determining market trends. Recent power struggles have come to the forefront—one side demands more flexible liquidity policies to stimulate short-term growth, while the other insists on maintaining the principle of central bank independence. This is not only a clash of policy stances but also a watershed moment for the direction of global liquidity supply.

Why is this topic worth paying attention to? Simply put, the Federal Reserve Chair controls the pricing of global funding costs. Once interest rates are adjusted, the entire risk asset market—from stocks and bonds to cryptocurrencies—must recalibrate. Political cycles tend to favor short-term stimulus and growth, while central banks need to balance inflation and growth. The tug-of-war between these forces ultimately determines whether the upcoming period will be characterized by abundant liquidity and an upward cycle or by tight funds and bottoming volatility.

What does this mean for investors? There are two key directions: if political pressure ultimately leads to a change in leadership, a new round of easing with rate cuts could restart, potentially triggering a rebound in risk assets; conversely, if current policies persist, high interest rates will continue longer, and the market may repeatedly bottom out amid tightening liquidity. Volatility itself is not scary; what’s dangerous is the inability to see the direction clearly.

The critical window is early 2026. The current Chair’s term ends around that time, and who succeeds will determine the policy tone for the next cycle. Each potential candidate’s name could become a market turning point. This may seem like a high-level political issue, but fundamentally it relates to how you allocate your holdings and manage risk. Whether the future is a period of high interest rates or a liquidity boom largely depends on the outcome of this power game.