interestrates

The U.S. economy has entered a state of unusual calm in recent weeks. According to the latest Beige Book report from the Federal Reserve, business activity across all 12 districts remained mostly unchanged, while consumer spending has started to decline—especially among low- and middle-income households.
While wealthy consumers continue to spend as if nothing’s wrong, the rest of the population is tightening their belts. This growing economic divide is now reflected even within the Fed itself.

Fed in the Dark: Conflicting Forecasts and Missing Data
Due to the recent government shutdown, the Fed is heading into its key December meeting without updated data on employment and inflation. Policymakers are, in essence, making decisions "blindfolded." Some are pushing to cut interest rates, while others prefer to hold steady.
Markets now estimate an 80% chance of a rate cut, following public signals from several of Fed Chair Jerome Powell’s close allies suggesting support for monetary easing.

Hiring Slows as Labor Costs Rise
Across the U.S., companies are not resorting to mass layoffs but are implementing hiring freezes instead. Many are managing costs by allowing natural attrition, such as retirements, to reduce their workforce.
However, finding skilled workers remains a challenge. Philadelphia reports rising wages due to fierce competition for a shrinking labor pool, while New York struggles to find qualified AI professionals.

The Wealthy Keep Spending, Everyone Else Cuts Back
Affluent consumers continue to spend, propping up parts of the economy, while others are cutting back sharply. In some regions, people are skipping restaurant visits, limiting clothing purchases, or forgoing personal care services.
In St. Louis, for example, regular diners now visit two or three times a week instead of daily. In San Francisco, lower-income households are slashing spending on healthcare and food, even as the wealthy keep shopping.

What’s Next? Uncertainty and Cautious Optimism
Businesses remain cautious and prefer to wait and see. Cleveland described the mood as a “collective holding of breath,” while Richmond reported such low consumer confidence that expensive purchases are being postponed.
Demand is rising in specific sectors—like AI-powered data center construction—but overall, concerns about the near future persist.
Both the Fed and the broader market stand at a crossroads. The key question: Can policymakers balance restraint with the need to support an economy where inequality is becoming more painful than inflation?

#economy , #usa , #interestrates , #Fed , #fomc

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Behind closed doors at the White House, a crucial decision is approaching — who will take the helm of the U.S. Federal Reserve in the coming years? According to recent reports, Kevin Hassett, director of the National Economic Council and close Trump ally, is now leading the race. His outspoken stance on aggressively cutting interest rates makes him the perfect candidate in Donald Trump’s eyes, as the former president seeks a clear shift in monetary policy.

Trump Seeks a "Dovish" Leader
Sources familiar with the matter say Trump is looking for someone at the Fed who will prioritize lower interest rates and be more in tune with the White House's priorities. Hassett has impressed with his clarity — in a recent Fox News interview, he stated that, if appointed as Fed Chair, he would immediately cut rates, citing current economic data. This bold position has moved him ahead of the pack.
Trump has had a tense relationship with current Fed Chair Jerome Powell, often criticizing his cautious approach. Now, he is reportedly considering replacing Powell even before his term expires in May 2026.

Decision Expected Before Christmas
The selection process is entering its final phase. Treasury Secretary Scott Bessent, who is overseeing the candidate interviews, confirmed that this week will conclude the formal interviews. Finalists will then meet with Trump campaign chair Susie Wiles and Vice President J.D. Vance.
Trump has previously named the three most likely contenders: Kevin Hassett, Kevin Warsh, and Christopher Waller. According to White House insiders, the final choice may be announced before Christmas.

Tensions Around Powell Are Escalating
The pressure surrounding Powell is mounting. Last week, Trump publicly called him "grossly incompetent" and joked that even Treasury Secretary Bessent could be replaced if interest rates don’t fall quickly. While Powell could remain on the Fed’s Board of Governors for two more years after his chairmanship ends, his chances of staying on in a leadership role are dwindling.
Another leadership change is also on the horizon — Stephen Miran's 14-year term as Fed Governor ends on February 1, and he is currently on unpaid leave from the White House Council of Economic Advisers.

The Future of the Fed Hinges on Political Alignment
Economists warn that Hassett’s nomination could face resistance within the Federal Open Market Committee (FOMC). Neil Dutta from Renaissance Macro Research suggests Hassett might struggle to secure a majority vote, as many current policymakers maintain a more conservative stance on inflation and labor data.
The direction of U.S. monetary policy will largely depend on who Trump chooses to lead the central bank. One thing is clear — Hassett’s name is gaining momentum, and markets are watching his potential appointment with great interest.

🔹 What do you think a leadership shake-up at the Fed would mean for markets? Could Hassett really take over Powell’s seat?

#TRUMP , #Fed , #KevinHassett , #FederalReserve , #interestrates

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,,The information and views presented in this article are intended solely for educational purposes and should not be taken as investment advice in any situation. The content of these pages should not be regarded as financial, investment, or any other form of advice. We caution that investing in cryptocurrencies can be risky and may lead to financial losses.“