To The Moon

When it comes to clues about the next Federal Reserve Chair, the latest signal didn’t come from insiders or leaks — it came from the one person who never minds sending signals himself: Donald Trump.

In a recent appearance, Trump said he would announce his pick for the next Fed Chair “early next year.” He didn’t spell it out, but markets took it as a strong hint toward Kevin Hassett — the current NEC Director and a long-time advocate of aggressive rate cuts, who has quickly become the frontrunner in public speculation.

Meanwhile, current Fed Chair Jerome Powell’s term runs until May 2026.

This makes it a fitting moment to look back:

How did Powell actually perform during one of the most turbulent periods in modern economic history?

Why are reviews of him always “mixed but respectable”?

And if Kevin Hassett really becomes the next Fed Chair, what direction might U.S. monetary policy — and financial markets — be heading toward?

1. The Powell Era: Walking on a Knife’s Edge

History will likely place Jerome Powell’s term under the chapter titled “Central Banking in Extreme Conditions.” A pandemic shock, supply chain chaos, the fiercest inflation in 40 years, and multiple stress points in the financial system — he inherited an economy that was holding together, but just barely.

Powell’s playbook was simple, though hardly painless: slam on the brakes, then ease off slowly.

Beginning in 2022, the Fed launched an aggressive tightening cycle that eventually pulled inflation back toward its target range. The U.S. economy avoided recession, unemployment stayed historically low, and even during the weakest quarters, business and consumer activity never fell off a cliff.

By 2025, the Fed pivoted — beginning a gradual rate-cut cycle that brought interest rates down to around 3.75%–4%.

That same year, the Fed abandoned the “average inflation targeting” framework introduced in 2020 and returned to a more traditional 2012-style mandate, signaling it would no longer tolerate extended overshoots of inflation.

Economists generally praised the shift as pragmatic: in an era where “any policy could be wrong,” Powell managed a credible soft landing — something many central banks failed to achieve.

But the Criticism Never Went Away

Even with stable macro data, Powell has never enjoyed strong public approval.

The reasons are straightforward: High rates hurt almost everyone.

• Families can’t afford mortgages

• Companies face soaring borrowing costs

• Tech stocks struggle to expand under tight conditions

• And although prices cooled, everyday life still doesn’t feel “cheap again”

The harshest attacks came from Trump’s circle, which repeatedly criticized Powell for being “too slow to cut” and for “holding back growth.” In private events, Trump even referred to Powell as a “dummy,” accusing him of failing to support the economic expansion and of “not playing along with the political timetable.”

At one point, Trump even posted a cartoon showing himself firing Powell — a moment that symbolized their long-running tension.

Meanwhile, the White House’s audit of the Federal Reserve building renovation was widely interpreted as political pressure. Powell’s response was calm but firm: through testimony and policy communication, he leaned on Congress for institutional support and emphasized the Fed’s independence.

Still, many analysts argue that defending the Fed’s autonomy may have been Powell’s most important achievement — especially in an era when political influence over monetary policy is growing stronger.

2. If Hassett Takes Over: A New Era of Easing Monetary Policy?

If Kevin Hassett ends up being the nominee, markets expect a meaningful shift in tone — and possibly in policy.

Hassett has already hinted openly at what he believes the public wants: lower auto loans, cheaper mortgages, and a more accommodative environment for borrowers.

That’s why markets are already anticipating:

• Faster rate cuts

• Looser financial conditions

• Lower Treasury yields

• A rally in equities — especially tech and real estate

Even without formal confirmation, asset prices have begun adjusting to the possibility of a more dovish Fed.

But Easier Policy Comes With Bigger Risks

“Easy” isn’t free.

A Hassett-led pivot could bring:

• A renewed inflation wave

• Pressure on the U.S. dollar

• A more politicized Federal Reserve

• Markets becoming overly reliant on policy support

Several Wall Street strategists have warned clients:

“If monetary policy becomes increasingly synchronized with the political cycle, asset volatility may rise — not fall.”

In other words, the question isn’t only “Will rates go lower?” It’s whether the entire framework of U.S. monetary policy could shift.

3. Final Thoughts: A Turning Point for the U.S. Economy

Regardless of where you stand, several things are now clear:

• Powell’s era is indeed entering its final phase

• Trump’s desire to replace him is no longer subtle

• Hassett’s name will continue to dominate market conversations

• Any nominee must still be confirmed by the Senate — and if the pick comes from outside the Fed system, he or she may receive a 14-year term as a Fed Governor starting Feb 1 next year

Most importantly, the next 1–2 years of interest-rate policy, the dollar’s trajectory, and the valuation of U.S. equities will all be shaped by this leadership transition.

The current calm may be nothing more than the eye of the storm.

🤔Discussion:

• How would you rate Powell’s performance over the past few years — and why?

• If Hassett takes over, will the Fed really deliver the aggressive rate cuts markets expect? Could rates fall below 3%?

• Does a looser monetary environment guarantee a new bull market for U.S. stocks? Which sectors benefit most — and what risks are overlooked?

• How important is central bank independence? With political pressure rising, can the Fed realistically maintain its “data-first” principle?

💭Looking forward to your thoughts！

For SG users only, Welcome to open a CBA today and enjoy access to a trading limit of up to SGD 20,000 with unlimited trading on SG, HK, and US stocks, as well as ETFs.

Find out more here.

Complete your first Cash Boost Account trade with a trade amount of ≥ SGD1000* to get SGD 688 stock vouchers*! The trade can be executed using any payment type available under the Cash Boost Account: Cash, CPF, SRS, or CDP.

Click to access the activity

Other helpful links:

• 💰Join the TB Contra Telegram Group to Get $10 Trading Vouchers Now🎉

• How to open a CBA. How to link your CDP account. Other FAQs on CBA. Cash Boost Account Website.