President Donald Trump is poised to suffer one last defeat at the hands of the Federal Reserve tomorrow as Chairman Jerome Powell prepares to depart, according to a new report.
Bloomberg reported on Tuesday that the central bank seems likely to vote to hold interest rates steady at its next meeting, even though Trump has publicly pressured the bank to lower interest rates throughout his second administration. Powell has previously cited the war in Iran and elevated inflation as reasons the central bank would leave interest rates unchanged.
The vote is expected to take place as Powell prepares to depart the Federal Reserve at the end of his term in May. Trump has nominated Kevin Warsh to replace Powell, but his nomination has been stalled in Congress.
"But Trump may not get the quick rate cuts he’s been seeking even after Warsh is installed," according to the report. "For one thing, Warsh can’t just lower borrowing costs by fiat. He needs to build consensus among the other 11 policymakers on the Fed’s rate-setting committee — and Powell could potentially still be among them, since he still holds a governor’s seat through January 2028. (It’s only his chairmanship that ends this coming month)."
Powell previously said he would remain Federal Reserve chairman on an interim basis until a successor is appointed. That decision has put the Federal Reserve on a collision course with Trump over who has the power to remove the central bank's leader.
"Regardless of what Powell decides, there’s also the looming impact of hikes in gasoline and other prices stemming from the war, which could persuade Fed policymakers to stay on hold," the report added. "In fact, futures markets aren’t expecting any rate change over the next 12 months and more, something that hasn’t been the case for at least three years."