Fed’s Future in Flux as Trump Eyes Powell Replacement Amid Rate Cut Speculation
Speculation over Jerome Powell’s future as Federal Reserve chair has intensified in recent days. President Trump has openly criticised Powell and pushed for lower interest rates. Meanwhile, markets are watching closely as a potential replacement—Kevin Hassett—gains attention for his stance on looser monetary policy.
The uncertainty has already affected currency markets, with the euro showing unexpected strength against the US dollar.
Kevin Hassett, currently director of the National Economic Council, has emerged as a leading candidate to replace Powell. He has repeatedly called for lower mortgage rates and a more relaxed approach to monetary policy. If appointed, his leadership could mark a major shift in how the Fed manages the US economy.
President Trump’s public criticism of Powell has added pressure ahead of the Fed’s next rate decision in mid-December. Many analysts now expect a rate cut, though opinions remain split on whether the central bank’s board would fully back such a move.
The euro has held firm amid the speculation, trading at $1.1595—higher than its early session levels. The European Central Bank set its reference rate at $1.1577, up from $1.1551 the previous day. The currency’s resilience comes as traders anticipate further easing by the Fed, which could weaken the dollar in the stock market today.
Markets are reacting cautiously, aware that any policy change could ripple through global trade and financial systems. Investors are now waiting for the Fed’s December meeting, where a decision on rates will be announced.
The Fed’s next steps will be closely scrutinised, with a possible rate cut now seen as more likely. Hassett’s potential appointment could bring a lasting shift in US monetary strategy. For now, the euro remains steady, but further developments may test its strength in the stock market today.
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