Overview
- Trump told Reuters he has no current plan to fire Jerome Powell, calling the situation "too soon, too early," while signaling he could name a successor within weeks and citing Kevin Warsh and Kevin Hassett as leading options.
- Powell disclosed grand jury subpoenas over his June testimony about renovation cost overruns and called the investigation a political pretext to influence interest‑rate decisions.
- More than a dozen global central bankers and all living former Fed chairs publicly backed the Fed’s independence, and economists warned that politicization could lift inflation expectations and Treasury yields.
- Markets largely expect the Fed to hold rates at the late‑January meeting, with CME FedWatch showing very low odds of a cut as inflation remains above the 2% target after three reductions in late 2025.
- Sen. Thom Tillis and other Republicans warned they may block Fed nominations until the probe is resolved, and legal limits allow removal of Fed governors only for cause, complicating any rapid shake‑up.