When your President is a former reality TV star, he knows how to get airtime. I’ve been following market indicators now for the better part of three decades and have never seen POTUS be in the middle of everything like our current Commander-in-Chief. Part of that equation is his business and development background. The Donald has built an empire by using his influence to get what exactly he wants. ‘Merica First.
So for better or worse, his naturally orange likeness is yet again at the center of the discussion of the future of interest rates–much to the chagrin of 68% of the country. HOWEVER, the reality is that the President has the duty to appoint the Fed Chair, and Mr. Trump himself selected Jerome Powell during the former’s first term in 2017. Unlike Donald, Jerome has served in his office ever since he got it, having been reappointed by Joe Biden in 2022. His current four year tenure as Chair of the FOMC is coming to an end in four months time. Mr. Powell’s unwavering commitment to his data-centric decisions and unflappable decorum in the face of criticism have not fared well against the goals of the current administration, and he will be replaced.
But not before the Federal Open Market Committee holds their first meaning of 2026 next Tuesday and Wednesday. At the conclusion of the meeting, Jerome Powell will do a little dance, make it a little love, and tell the world that interest rates need to stay put. To wit, there’s currently a 2.8% statistical probability that he drops them. But before that party even gets started, I expect the President to announce his selection for the next Fed Chair as a way of upstaging the FOMC and downplaying any cautious language the Fed statement may contain. As of this writing, the top four contenders are all middle-aged white guys. But interestingly enough, not all of them have historically been proponents Trump’s call for interest rate cuts. That was a surprise to me
