Overview
- Trump told Reuters he has no immediate plan to remove Jerome Powell and is weighing Kevin Warsh or Kevin Hassett as potential successors, with an announcement expected in the coming weeks while ruling out Scott Bessent.
- Powell confirmed grand jury subpoenas tied to the $2.5 billion Fed headquarters renovation and called the probe a pretext to pressure interest‑rate decisions, while denying wrongdoing.
- Global central bankers issued a rare statement of “full solidarity” with Powell, and leaders such as Jamie Dimon warned that weakening the Fed’s autonomy could lift inflation expectations and long‑term rates.
- Some senators, including Republican Thom Tillis, threatened to block Fed nominees until the investigation is resolved, as legal limits allow removal of Fed governors only for cause and Powell’s chair term ends in May 2026 with board tenure possible through 2028.
- Markets largely expect the Fed to hold rates at the January meeting, with CME FedWatch showing a small chance of a cut, as recent inflation readings remain above target and Chicago Fed’s Austan Goolsbee cautions that eroding independence risks an inflation resurgence.