Powell Remains on Fed Board, Trump Renews Criticism
US President Donald Trump has again attacked Jerome Powell after the Federal Reserve Chairman stated he would remain on the Fed Board of Governors after his term as chairman ends on May 15, 2026. Powell's move is seen as closing the door on Trump's opportunity to quickly fill a new vacant seat at the US central bank.
Powell said his decision to remain as Fed chairman was driven by concerns about political and legal pressure that could potentially undermine the central bank's independence. Reuters reported that Powell wanted to help maintain the institution's stability amid the leadership transition and pressure from the Trump administration.
This tension arose after the Fed again held interest rates, while Trump had previously pushed for a lower interest rate policy. On the market side, the conflict between the White House and the Fed has added to uncertainty as investors view the central bank's independence as a crucial factor in maintaining the credibility of US monetary policy.
If political pressure on the Fed continues to increase, the market could potentially become more sensitive to movements in the US dollar, bond yields, and safe-haven assets like gold. Investors are now watching to see whether Kevin Warsh, Powell's potential replacement, can build policy consensus without raising concerns about political interference at the central bank.
Reasons:
Powell chose to remain as Fed governor after his term as chairman ended.
Trump wanted more room to influence the composition of the Fed Board.
The Fed has not yielded to pressure to cut interest rates aggressively.
Concerns arose about the independence of the US central bank.
The leadership transition to Kevin Warsh has sparked uncertainty.
Things to Watch:
Trump's continued response to Powell.
The confirmation process for Kevin Warsh as the next Fed Chair.
The direction of the Fed Board's vote in the upcoming policy meeting.
The movement of the US dollar and Treasury yields.
The impact on gold, stocks, and global market sentiment. (CP)
Source: Newsmaker.id
