The noose tightens on Jerome Powell, the boss of the American Federal Reserve. The more the weeks pass, the more the question arises as to if he will go until the end of his mandate which matches in May 2026. His days at the head of the central bank could indeed be counted, at least if he continues to resist the more than insistent demand for Donald Trump to lower interest rates.
A relaxation of monetary policy from the September meeting seems indeed unavoidable, especially since the publication in early August in early August employment that turned out to be not very reassuring on the state of health of the American economy. This Saturday, Michelle Bowman, the vice-president of the Fed, who had been appointed by Donald Trump in the first mandate of the latter and who recently opposed the status quo on American interest rates, estimated that the monetary institution should be “proactive” to preserve employment in the United States and lower the rates “Three times in the coming months”. Which would mean a drop to each of the Fed meetings still planned for 2025. In her speech, Ms. Bowman explains that she had spotted “signs of fragility “ on the job market.
The publication of these figures on employment caused a real explosion across the Atlantic and the fury of Donald Trump, who dismissed the economist supervising the publication, believing that the figures had been “manipulated” For political ends, to harm him. He reproached Erika MCENTARFER for having rigged the employment figures before the election to increase the chances of victory of the Democratic candidate Kamala Harris.
Four candidates to replace Powell
Another question is who could replace Jerome Powell. Last week, Donald Trump said he had four candidates in mind. He did not want to communicate the names on this “short list”. The Minister of Finance, Scott Bessent, strongly expected to take the head of the US central bank, would not be part. “”I asked him again last night: is it something you want?“Said Donald Trump last Tuesday at the microphone of CNBC. Mr. Bessent would then have indicated that he preferred to keep his ministerial portfolio.
Among the other candidates expected to succeed Mr. Powell, CNBC relies on the former Fed administrator, Kevin Warsh, and the director of the National Economic Council, Kevin Hassett, an important adviser to Trump.
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