Part 9/11:
The debate over Powell’s leadership is intense. President Trump has publicly stated he has no intention of firing Powell, though speculation persists about whether he will replace him once his term ends next year. Some officials, including Kevin Hasset, have publicly indicated that firing the Fed chair might be under consideration, but the prevailing view is that Powell’s independence is being respected for now.
The administration’s stance revolves around the belief that ultra-loose monetary policy risks sparking uncontrollable inflation — a prediction that recent data challenge. If inflation remains subdued and continues its downward trend, there may be little incentive for Powell to lower rates prematurely, especially given the political pressures.