Powell’s Out? 😬 Trump’s Fed Pick!

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Oh, the endless drama of Washington. It seems even the Federal Reserve isn’t immune to a bit of…reshuffling. Jerome Powell’s time is nearing its end, you see. May is coming, and with it, the unsettling possibility of change. President Trump, a man not known for his patience, is apparently preparing to inflict his will upon the nation’s central bank, choosing a successor. One almost pities the poor soul who takes the job. 🎭

The Financial Times whispers that Mr. Trump and his Treasury Secretary, Scott Bessent – a name that sounds suspiciously like a minor character in a Dickens novel – will be having a little chat with former Fed governor Kevin Warsh this Wednesday. But don’t get attached to Mr. Warsh; administration “sources” (those ever-reliable creatures) suggest Kevin Hassett is the favorite. And that, my friends, is causing a bit of a flutter in the markets. Like a sparrow noticing a hawk.

Hassett: The Man Who Agrees With The Boss

Mr. Hassett’s sudden surge in popularity is, shall we say, understandable. He’s rather fond of the idea of dramatically lower interest rates, which happens to align perfectly with the President’s…enthusiastic suggestions. Poor Mr. Powell, so insistent on a measured approach. All those months of quiet disapproval. Hassett, however, is delightfully compliant, even suggesting a rather bold 50-basis-point cut back in December. Such eagerness. 🤔

Naturally, Mr. Hassett insists he’ll be fiercely independent. “A data-driven Fed!” he proclaims. One almost believes him. Almost. Investors, however, are wearing a rather skeptical expression. They fear – and with some justification – that the appointment of Hassett would be less about monetary policy and more about… pleasing someone important. The indignity!

The Also-Rans

Besides Hassett and Warsh, we have a few other hopefuls circling the drain: Fed Governors Christopher Waller and Michelle Bowman, and a fellow from BlackRock named Rick Rieder. They all seem to share a common desire for lower rates, presumably fueled by the economic uncertainties brought about by those… spirited trade negotiations. It’s all rather exhausting, isn’t it? 😴

The final verdict is expected before the year gives up the ghost, and Mr. Bessent is tasked with the unenviable job of sorting through these candidates. The President has made his desires known. Change will happen. One way or another.

The Rate Cut Conundrum

The Fed has already dabbled with lower rates a couple of times this autumn, bringing the total cut to 1.5% over the past year and a half. They’re nearing a point where things might actually…stimulate the economy. Which is, apparently, a terrifying prospect for some. Some within the Fed think the current rates are “neutral”-neither helpful nor harmful. Imagine that. And, predictably, there’s going to be disagreement. Perhaps a few stern looks exchanged during the meetings. 🙄

Most believe another rate cut is on its way in December, when the year’s final meeting concludes. But don’t count on it. Mr. Powell, in his infinitely wise way, has cautioned against expecting too much. After all, a little disappointment builds character. Doesn’t it?

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FAQs

Who is the leading candidate for the next Federal Reserve chair?

Kevin Hassett is currently the frontrunner, largely due to his convenient agreement with the President on interest rates, while assuring everyone he’ll be “independent.” It’s a delicate balance.

When will the new Fed chair be announced?

Expect an announcement before the end of the year, following the culmination of interviews. One hopes the process doesn’t take too long.

How might a new chair affect the economy?

A chair leaning towards lower rates could inject some life into the economy, though whether it’s a healthy jolt or a desperate attempt to avert a crisis remains to be seen. Perhaps both.

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2025-12-10 10:26