Impact of Fed chair investigation on market
We can see how the investigation into US Federal Reserve Chairman Jerome Powell is having an impact on the market.
WASHINGTON, DC – President Donald Trump announced on Friday, January 30, that he will announce his nominee for Federal Reserve Chairman to replace Jerome Powell, who has been in a dispute with the president over the fiscal year.
The president said he would announce his selection in the morning.
President Trump spoke to reporters Thursday night on the red carpet at the premiere of First Lady Melania Trump’s new documentary, “Melania,” about the accelerated deadline. President Trump said earlier in the day that an announcement would be made next week.
“I’m sure this is someone who will do a good job,” Trump told Cabinet members during an afternoon meeting at the White House. “We are paying too much interest to the Fed. Fed interest rates are too high, unacceptably high.”
Mr. Trump, who has spoken publicly in recent months about finding Mr. Powell’s replacement, has narrowed his field to four finalists for the position of Fed chair. Christopher Waller, Fed Governor. Kevin Warsh, former Fed governor. Rick Rieder, senior managing director at investment firm BlackRock.
President Trump said he thinks highly of Hassett but doesn’t want to lose his regular television appearances as a White House economic adviser. “It’s a serious concern to me,” President Trump said at a White House event on January 16, referring to his chief of staff, Susie Wiles, adding, “We don’t want to lose him, Susie.”
Powell’s term as Fed chair ends in May, but his term as a Fed board member runs through 2028. Mr. Trump first appointed Mr. Powell as chairman of the seven-member Federal Reserve Board in 2017. Former President Joe Biden nominated Powell for a second four-year term in 2021. Congress approved Powell’s reelection in 2022.
Trump has repeatedly criticized Powell in his first year in the White House, threatening to fire him from the independent agency’s board for refusing to lower interest rates. President Trump has indicated he wants a Fed chairman who agrees with him on interest rates, raising questions about whether the executive branch is interfering with the Fed’s autonomy.
“I don’t want to do that because I think he’s politically biased,” Trump said of Powell at a Cabinet meeting, even though Powell is a Republican and Trump originally nominated him. “I really do. I think he’s politically biased.”
The Justice Department this month launched an investigation into Mr. Powell’s congressional testimony about ongoing renovations at Fed headquarters.
But Powell remains unfazed by the president’s pressure. The Federal Reserve kept its key interest rate unchanged at a range of 3.5% to 3.75% at its January 28 meeting, ending three consecutive months of 0.25% interest rate declines.
X Contact Joey Garrison at @joeygarrison.
