Fed Chair Jerome Powell’s term as the Federal Reserve chair will end in May 2026. Jerome Powell became Fed Chair in 2018 and was nominated during President Donald Trump’s first term in office. Most Wall Street investors view Powell positively. Under his tenure as Fed Chair, Jerome Powell has had to navigate several obstacles, including the COVID-19 crash of 2020, the inflation spike of 2022, and the regional banking scare of 2023.
Although Jerome Powell successfully reigned in a 40-year inflation rate high in 2022 (where CPI peaked at 9.1%) and equity markets are near new all-time highs today, the success of his reign as Fed Chair is likely to be determined by who you ask. If you ask right-leaning critics, they will point to:
· Monetary Policy Hypocrisy: President Trump and Trump cabinet members, such as Treasury Secretary Scott Bessent, argue that Fed Chair Powell was too slow to cut interest rates and is not cutting enough. Additionally, President Trump believes that Powell cut interest rates by 50 basis points just before the 2024 Presidential election to help Joe Biden get elected.
· Building Renovation Cost: President Trump has also criticized Fed Chair Powell after a long-planned renovation of the Federal Reserve’s office buildings went far over budget.
Meanwhile, left-leaning observers defend Fed Chair Powell’s actions, citing the Fed’s independence and reminding people that President Trump nominated Powell to the Fed after all.
Although President Trump threatened to fire Powell several times in the past, it now appears that Powell will serve out the remainder of his term until the middle of next year. However, over the weekend, President Trump announced that he has decided on the next Fed Chair and will be announcing it soon.
According to Polymarket, Kevin Hassett, the current Director of the National Economic Council, is the overwhelming favorite to be Trump’s Fed pick. In fact, over the past week, Hassett’s odds to become the next Federal Reserve Chair have spiked from ~40% to 75%.
Image Source: Polymarket
In addition to being the overwhelming favorite on betting markets, Hassett has the traits President Trump is looking for, including unwavering loyalty and a “dovish” view of monetary policy. While it’s not a lock yet, a Hassett-led Fed would be extremely bullish for stocks, particularly interest-rate-sensitive names like JP Morgan (JPM), Home Depot (HD), Lennar (LEN), NextEra Energy (NEE), and American Electric Power (AEP).
