Vosh Policy Advocacy: Promoting a combination of interest rate cuts and balance sheet reduction; inflation is a choice for the Federal Reserve.

BlockBeats News, December 16 — As Trump confidant pushes for Waller to become the next Federal Reserve Chair, the market’s betting odds on Waller becoming the new Fed Chair have surpassed Haskett, rising to the top. Deutsche Bank’s Matthew Luzzetti team’s latest research report indicates that if Waller is elected Fed Chair, he may support interest rate cuts while advancing balance sheet reduction (QT). However, the feasibility of both measures occurring simultaneously depends on regulatory reforms that can reduce the banking system’s demand for reserves, which remains uncertain in the short term. As a popular successor to Powell, Waller earlier this year proposed the view that “inflation is a choice,” believing that inflation is not caused by supply chains or geopolitical issues, but originates from the Fed’s own policy decisions. He called for the Fed and the Treasury to each be responsible for interest rates and fiscal accounts respectively, and emphasized that the Fed must reform and return to its core mission of maintaining price stability. Despite policy criticisms, he is highly optimistic about the US economy, believing that AI and deregulation will bring about a productivity boom similar to the 1980s. In terms of background, Waller is a lawyer by training, having served as a Federal Reserve Board member from 2006 to 2011, playing a key role in communication during the global financial crisis. He has long criticized the Fed’s aggressive balance sheet expansion over the past 15 years, believing that quantitative easing has deviated from the central bank’s core functions. Currently, Waller is a partner at the Duquesne family office, Druckenmiller, and also serves as a distinguished visiting scholar at the Hoover Institution and a lecturer at Stanford Graduate School of Business. His cross-disciplinary background spanning academia, regulation, and investment gives him broad influence in the fields of monetary policy and financial markets. (Wall Street Journal)