Trump Signals Major Interest Rate Cuts with New Fed Chair
US President Donald TRUMP has reignited discussions on monetary policy, asserting that interest rates will plummet once he appoints a new Federal Reserve chair to succeed Jerome Powell. Speaking in Iowa on January 27, Trump emphasized his intention to usher in an aggressive rate-cutting cycle, aligning with his longstanding critique that the Fed has maintained excessively high borrowing costs.
Powell’s term as Fed chair expires in May 2026, and speculation about his successor has intensified. Trump’s remarks suggest an imminent announcement, potentially reshaping market expectations for US interest rates.
Despite Trump’s comments, markets anticipate the Federal Reserve will maintain current rates at today’s FOMC meeting. The CME FedWatch Tool indicates a 97% probability of no rate cut, with the federal funds rate likely staying within the 3.5%–3.75% range.
Traders are closely monitoring the Fed’s guidance, as expectations for a rate cut by June have risen amid cooling inflation and mounting political pressure. The Fed remains cautious, citing trade tensions, tariffs, and geopolitical risks.
Trump has reportedly narrowed his shortlist for Powell’s replacement to four candidates, including BlackRock CIO Rick Rie.
