Recent concerns over the future of the Federal Reserve Chair have attracted market attention. Powell's term as Chair ends in May 2026, but his board membership can be extended until January 2028—this dual role setup is extremely rare in history, with the last occurrence dating back to the post-World War II Ackels era.

Such a situation harbors risks. When a new Chair formulates monetary policy, if there is a highly respected predecessor with potentially differing views sitting nearby, it will inevitably weaken the new Chair's authority and may even trigger policy disagreements within the Federal Reserve. The current pressure on Powell, to some extent, reflects considerations of a thorough overhaul of the decision-making leadership.

There are multiple hidden risks in the economic fundamentals. The commercial real estate market, private debt, credit card debt, and asset quality of small and medium-sized banks may all be approaching warning levels. In a long-term high-interest-rate environment, whether certain key liquidity links can still support stability remains questionable. Some analysts believe that the decision-making authorities may have a more pessimistic view of the economic situation than publicly available data, and are eager to push the Fed to cut rates immediately, pause balance sheet reduction, or even consider restarting quantitative easing to stabilize the economy.

However, from a data management perspective, initiating significant rate cuts before official economic indicators show substantial deterioration faces compliance issues. The fundamental disagreement between both sides essentially lies in different risk assessments—one favors early prevention, while the other insists on a data-driven decision-making framework.

In any case, the operational independence of the Federal Reserve has already been significantly affected. If monetary policy is excessively influenced by political factors, market confidence in the institutional framework may waver, thereby pushing up the prices of safe-haven assets. The recent continuous rise in gold partly stems from market concerns over policy stability. From a longer-term perspective, the weakening of central bank independence could cause structural damage to market confidence, which is also something all asset allocators should pay attention to.