Recent rumors circulating in Wall Street circles have basically been confirmed—the possibility of Hassett taking over the Fed is growing. From now until Powell officially steps down next May, a subtle power vacuum has quietly begun.

In simple terms, as soon as a successor emerges, the originally stable internal structure will naturally loosen. Those officials and think tanks who want to secure a position in the new era have already begun to adjust their alliances. And the current chairman's influence? It will inevitably be diluted little by little.

What does this mean? In the next six months, the Fed may not be so united internally. Debates about whether interest rate hikes should be fast or slow, whether inflation can be contained, and whether the economy will have a soft landing or crash—these discussions will spill from the meeting rooms into public statements. Factional disagreements might even be brought directly to the forefront.

Traders need to be particularly cautious during this time. Policy signals may become chaotic: some voices represent the official stance, while others may just be a faction testing the waters. This chaotic state during the transition period alone is enough to cause significant fluctuations in market expectations.