Trump leans toward Warsh or Hassett to lead Federal Reserve - WSJ

Former President Donald Trump has named Kevin Warsh and Kevin Hassett as top contenders for the position of Federal Reserve chair, expressing confidence in their capabilities. This announcement comes as Trump prepares to finalize his selection for the role, which is pivotal in shaping U.S. monetary policy.

The Federal Reserve has reduced interest rates by 25 basis points, despite expectations for economic growth in the coming year. This decision raises questions about the Fed's strategy and its capacity for further rate cuts, as discussed by former Council of Economic Advisers chair Glenn Hubbard, who suggests limited room for additional reductions through 2026.

Former President Donald Trump is reportedly leaning towards nominating either Kevin Warsh or Kevin Hassett to lead the Federal Reserve, as he prepares to finalize his selection for the position. This decision follows ongoing discussions about the future direction of U.S. monetary policy and the role of the Fed in managing economic conditions.

The Federal Reserve has taken a unanimous decision to reappoint its regional bank presidents, a move interpreted as a strategy to insulate itself from potential leadership changes under former President Trump. This action is seen as a proactive measure to maintain stability within the institution amid ongoing economic challenges.

President Trump indicated he is leaning towards nominating either former Federal Reserve governor Kevin Warsh or National Economic Council Director Kevin Hassett to lead the Federal Reserve next year, emphasizing the importance of consultation on interest rates. This statement was made during an interview with The Wall Street Journal.

Corporate tax revenue has significantly decreased following the recent tax cuts implemented by the Republican administration, with economists suggesting that these tax breaks may ultimately prove beneficial. Companies like Walmart are already reporting lower tax payments, indicating early financial impacts of these changes.

Key U.S. economic data on jobs and inflation is set to be released, which will be closely monitored by investors as they assess the likelihood of further interest rate cuts by the Federal Reserve. This data is crucial for understanding the current state of the labor market and inflation trends.

The Federal Reserve's decision to cut interest rates by a quarter of a percentage point has revealed significant internal divisions among officials, with contrasting views on how to address a cooling labor market and elevated inflation. Fed Chair Jerome H. Powell is tasked with navigating these disagreements to reach a consensus among his colleagues.