Powell's Latest News:

On Relations with Trump

Powell expressed hope to establish a good relationship with the White House under Trump's leadership and with his nominee for Treasury Secretary. However, Trump stated on NBC's Meet the Press that he has no plans to remove Powell before the end of his term in May 2026. Nonetheless, the relationship between Powell and Trump remains uncertain, especially in light of the Federal Reserve's decision to potentially begin raising interest rates again, which could lead to new conflicts.

On Inflation and Interest Rate Expectations

In December, Powell indicated that the Federal Reserve expects inflation to be higher than previously anticipated, forecasting it to reach 2.5% by the end of 2025, instead of the earlier prediction of 2.2%. This revision has led the Fed to reduce the expected number of rate cuts from four to two next year. He also noted that the Fed still faces too many unknowns regarding how policies proposed by Trump, such as tariffs, will affect interest rate setting.

On the Rotation of the Fed's Voting Committee

In 2025, Boston Fed President Collins, St. Louis Fed President Bullard, Kansas City Fed President George, and Chicago Fed President Goolsbee will replace Cleveland Fed President Mester, San Francisco Fed President Daly, Richmond Fed President Barkin, and Atlanta Fed President Bostic, becoming the new voting members. Among the new voters, except for Goolsbee, who is the only 'dove', Collins and Bullard are categorized as mildly 'hawkish', while George is classified as moderately 'hawkish', which could lead to more divisions within the Fed's FOMC in 2025.