The Walsh era has officially begun. The new policies of the Federal Reserve have reshaped the global economic landscape.

On May 13, 2026, the US Senate officially approved the personnel vote, appointing Kevin Walsh as the new chairperson of the Federal Reserve. This marked the official departure of the Federal Reserve from its previous policy cycle and its full transition into the new monetary policy era led by Walsh. Before taking office, Walsh had already proposed a brand-new monetary policy approach. This regulatory framework, which is different from the previous ones, quickly became the focus of attention in the global financial market. Its policy direction will also profoundly influence the trend of the US dollar, the global interest rate pattern and the economic development trends of various countries.

This major personnel change at the top of the Federal Reserve is not merely a simple transfer of positions; it is an important adjustment made in line with the current economic situation and domestic political environment of the United States. Currently, the US economy is still deeply trapped in the recurring inflation, persistent high interest rates, and significant fiscal pressure. The economic recovery pace is unstable, and consumer spending and the development of the real economy are significantly constrained. At the same time, with the acceleration of the domestic political process in the United States, the market's demand for monetary policy adjustments has become increasingly strong. It is urgently needed to adopt a new regulatory approach to balance the two core goals of stable growth and inflation prevention. Wash has extensive financial industry experience and mature macroeconomic analysis thinking. His proposed reform ideas precisely align with the current expectations of the US market for a monetary policy transition, and he successfully takes over the responsibility of the Federal Reserve's policy regulation.

Compared to the previous relatively stable and conservative policy style that closely follows data and makes slow adjustments, Wash's proposed new monetary policy framework has a more distinct reform color and flexible regulatory thinking. At the inflation assessment level, he discards a single price reference indicator and adopts multi-dimensional economic data to comprehensively judge the inflation trend, no longer adhering to fixed regulatory standards, leaving sufficient space for the flexible adjustment of monetary policy. At the policy implementation level, he weakens the previous clear interest rate expectation guidance and reduces market reliance on a fixed interest rate path, insisting on making regulatory decisions based on real-time economic changes. At the same time, Wash advocates that the Federal Reserve return to its core function of financial regulation, simplify policy coverage, focus on stabilizing prices and maintaining the stability of the financial market, and promote monetary policy to return to its rational origin.

In addition, the most attention-grabbing aspect of Wash's new policy is the combined regulatory model of simultaneous expansion of balance sheet reduction and interest rate adjustment. On the one hand, it steadily proceeds with the contraction of the balance sheet, tightening the US dollar liquidity in the medium and long term, and restoring the normal pricing order of the financial market; on the other hand, it timely adjusts the interest rate level to alleviate the huge pressure of high interest rates on the real economy, the real estate industry, and market investment and financing. This differentiated regulatory approach breaks the traditional model of either raising or lowering interest rates alone, striving to tighten speculative liquidity while creating a loose financial environment for the development of the real economy, achieving structural adjustment of the economy.

The new policy of the Federal Reserve under the Wash era will first have a profound impact on the domestic economy of the United States. In the short term, the tightening of liquidity will exacerbate market fluctuations, causing valuation adjustment pressure in the stock market and bond market, and increasing the operating pressure of the leveraged financial industry. However, in the long term, rational monetary policy can gradually suppress the rebound of inflation, reduce enterprise financing costs, boost market consumption and investment confidence, help the US economy shake off the concern of stagflation, and lay a solid foundation for economic recovery. However, the implementation of this new policy still faces many obstacles. The policy ideas differences within the Federal Reserve, the high fiscal debt pressure, will to some extent delay the policy implementation pace and increase the difficulty of regulation.

Looking at the global market, the policy shift of the Federal Reserve is even more influential on the world economy. The US liquidity pattern undergoes a reconfiguration, the trend of the US dollar exchange rate fluctuates more intensely, and global cross-border capital flows change accordingly. For many emerging economies with large external debts and insufficient foreign exchange reserves, the tightening of US liquidity is likely to trigger capital outflows, currency depreciation, and intensified input inflation, posing severe challenges to regional economic stability. Major central banks around the world will be forced to adjust their own monetary policies, and the divergence of interest rate policies among countries will intensify. The former situation of global monetary policy coordination has gradually been broken.

In conclusion, the era of Wash at the Federal Reserve has arrived, and the new monetary policy framework has initiated a new stage of adjustment in the global financial landscape. This new policy has both advantages and disadvantages, and the implementation results of the policy are full of uncertainty. Short-term market fluctuations are inevitable. All countries around the world need to proactively adapt to the new trends of monetary policy, strengthen their macroeconomic risk prevention and control, optimize the industrial economic structure, improve the management systems of foreign exchange and financial markets, and reduce the impact of external policy changes. Only by adhering to an independent and autonomous path of economic development and strengthening the internal driving force for economic growth can they maintain the bottom line of development in the tide of profound adjustments in the global economic landscape and achieve stable and healthy economic development.