Photo: Getty Images North America
Despite lowering rates under the Biden Administration, Fed Chair Jerome Powell has not yet lowered interest rates under Trump. So will Trump attempt to push Powell to resign over the issue or allow him to finish his term as Chairman of the Federal Reserve Board of Governors?
Powell's moves to cut rates last year were widely interpreted as political, suggesting that Trump could try to push Powell out because of it. Financial Planner Richard Rosso said, "Inflation was still above his target, and unemployment was at his target. So what was the reason for him to lower rates before? It didn't make any sense."
Despite this apparent political bias by Powell, Rosso thinks that his job is safe, at least for now. Rosso thinks Trump simply has bigger priorities than replacing Powell and said, "He's probably going to be there through his tenure in 2026. I haven't seen anything that says otherwise."
Right now, Rosso says that Trump is prioritizing lowering longer-term yields, which is giving Powell some wiggle room. Many economists also still assume that there will be one or two rate cuts later in the year, which may be enough to satisfy Trump.
Rosso did point out, however, that Powell isn't off the hook forever. If Powell ignores economic data indicating it's time for a rate cut for political reasons, that could be enough for Trump to try and push him out. He said, "I expect Trump is going to get one or two rate cuts, but if he doesn't get them, I totally expect Trump to turn around and say, 'I'm gonna look to replace him.'"