New Fed Chairman Announcement Likely in Early 2026

Federal Reserve Chairman Jerome Powell’s feud with President Donald Trump will finally come to an end when Powell’s term ends in May of next year. In a matter of months or even weeks, you’ll know who Powell’s replacement will be.

The President recently revealed, “We’ll be announcing somebody probably early next year for the new chairman of the Fed.” He added, “I talked to Scott about taking the job, but he doesn’t want it.”

Trump is referring to Treasury Secretary Scott Bessent, who some odds makers previously considered a strong candidate for the Federal Reserve chairman role. This just goes to show that the prediction market specialists are really just speculators.

At the moment, they’re setting the odds of White House Economic Advisor Kevin Hassett being the next Fed chairman at 81%. But again, this is just speculation and the odds can change at any given moment.

Until there’s a new Fed chairman, the friction between Trump and Powell will undoubtedly continue. Not long ago, the President called Powell a “real dope who should reduce rates,” adding, “I saw even Jamie Dimon said he should be reducing rates. I never saw Jamie Dimon say that.”

Courtesy: Kevin Gordon

This isn’t to suggest that Powell’s Federal Reserve won’t reduce the federal funds rate this month. Right now, practically everyone is assuming a December interest-rate cut, with the probability set at 95.9% (whatever that’s worth).

The implication isn’t that the Federal Reserve won’t cut interest rates this month, but rather that Powell is stubbornly reluctant to do so. Hence, Trump considers Powell a “stubborn ox” but the President assured that interest rates are “going to be coming down” nevertheless.

Among other knock-on effects, persistently high interest rates have kept the borrowing costs high on credit cards, auto loans, and personal loans. Additionally, Trump pointed to “mortgage rates” and indeed, high home-loan interest rates have been problematic for Americans wanting to own a home.

Truly, the American Dream has been slipping away from the middle class as homeownership is unaffordable for too many people in the 2020s. In contrast, U.S. rent prices are down 1.1% year over year, with October marking the 30th consecutive month with a year-on-year decline.

Courtesy: Charlie Bilello

We’ve become a nation of renters, as renting a home is more affordable than paying a mortgage in all 50 of the largest metro areas in the U.S. These types of dislocations in the economy underscore the urgency for changes in the nation’s monetary policy.

With a new Federal Reserve chairman to be announced soon, President Trump hopes to see crucial changes and assures that inflation is “going to go down a little bit further.” At the same time, Trump isn’t looking for zero inflation as he explains, “You want to have a little tiny bit of inflation, otherwise that’s not good either.”

The President doesn’t want deflation, which he says “can be worse than inflation.” In any case, Trump expects that the inflation rate “will soon be at a perfect level.”

It will be interesting to see how the U.S. economy and financial markets hold up as Trump’s administration is still at odds with Powell’s Federal Reserve and some members of Congress. Regardless of the outcome, I hope you’ll be well-positioned to prosper as America’s monetary policy will undoubtedly change in multiple ways.