Trump Considers Replacing Powell โฃas fed Chair,โ Fueling Rate Cut Speculation
the US financial landscape is bracing โfor potential โฃupheaval following Treasury Secretary Scott Besent’s suggestion that President Donald Trump may โคappointโ a new Federal Reserve chair by Christmas. This move comes amidst months โof publicโฃ criticism from Trump towardsโค current Chairโ Jerome Powell,whom he accuses of unnecessarilyโข raising interest rates.
Tensions reached a peak last week at the US-Saudiโ Investment Forum, where Trump publicly questioned Powell’s “mental problems” and expressedโ a desire to remove him. He also directly warned โBesent to address high interest rates,stating,”If โคyou don’t โfix โขthis quickly,I’ll fire you,okay?” Besent attempted toโ downplay the โPresident’s remarks to CNBC,calling them a “joke” and acknowledging the โฃcomplexities of monetary policy.
Hassett Emerges โas Frontrunner
According to Bloomberg reports, kevin Hassett, director โขof the White House National Economicโข Council, is โคconsidered the leading candidate to replace Powell, whose term expires in May 2026. Hassett aligns with Trump’s desire for โขimmediate rate cuts, stating onโข November 20th that he “would cut interest rates now” based on currentโค economic data, and criticizing central banks for losing control of โinflation.
Fed Divided on โNext Steps
This potential โleadership change occurs as the Federal Reserve itself is internallyโ divided on future interest rate policy. The fed โhas already implementedโข two successive quarter-point cuts, bringing the target range to 3.75% – 4%.
Market sentiment leans towards further easing,โข withโ traders assigning an 83% probability toโ a quarter-point cut at the December 10th โคmeeting, followingโ comments fromโค New York Fed President Johnโฃ Williams โsuggesting โroom for “further adjustment.”
However,โ presidents โคof the Federal Reserveโค Banks of Dallas (loriโ Logan) and Boston (Susanโค Collins) advocate for maintaining current rates “for a โperiod of time,” believing a restrictive policy remains appropriate.
This internal conflict leaves the market in a precariousโข position, awaitingโ either a Trump appointment favoring immediate cuts or a decision from โฃPowell under significant pressure as the โChristmas holiday approaches.