Bank of England Governor Andrew Bailey has spoken out in support of Federal Reserve Chair Jerome Powell, who has recently come under renewed fire from U.S. President Donald Trump. Speaking at a press conference in London, Bailey said he was “saddened” by Trump’s repeated attacks on Powell.

“Jay Powell is a dear friend of mine. We work very closely together, and I consider him a man of complete integrity,” Bailey stated—despite originally vowing not to comment on U.S. politics.

His remarks came at a time of increasing pressure on the Fed, as Trump continues to push for interest rate cuts even as inflation risks remain elevated. Just weeks ago, ECB President Christine Lagarde also voiced her support for Powell, describing him as “the embodiment of a courageous central banker.” But in Washington, Trump remains unconvinced and is preparing to replace Powell with a new Fed chair.

Uncertainty at Home: Rate Cut Exposes Divisions at the BoE

Bailey faced pressure not only from abroad but also at home. On the same day as his comments, the Bank of England cut interest rates by 25 basis points, but the decision revealed deep divisions within the Monetary Policy Committee. Four members voted to keep rates unchanged, four supported the 25-point cut, and one member pushed for an even deeper cut of 50 basis points. The tie forced a second round of voting, which eventually produced a narrow majority for the 25-point reduction.

This level of disagreement marked a sharp shift from June, when the committee voted 6–3 to keep rates steady. By August, however, rising uncertainty around inflation and economic growth had shattered any previous consensus.

Markets responded quickly. The British pound rose 0.5% as expected, but the FTSE 100 index fell 0.7% due to the stronger pound weighing on major exporters. Meanwhile, other European markets rallied, with Germany’s DAX gaining 1.1%, France’s CAC 40 up 1%, and the pan-European Stoxx 600 index rising 0.9%, driven by strong earnings.


Trump’s Fed Candidate Search Narrows as Waller Gains Momentum

Inside the White House, the search for Powell’s successor is gaining speed. Trump revealed that the shortlist now includes Treasury Secretary Scott Bessent, Vice President J.D. Vance, and Commerce Secretary Howard Lutnick. However, one name is gaining traction: Federal Reserve Governor Christopher Waller, a Trump appointee.

According to Bloomberg, Waller has impressed advisers with his forward-looking approach to policy, basing decisions on forecasts rather than just current data. They also value his deep understanding of the Federal Reserve System as a whole. While Waller has already met with Trump’s advisers, he has yet to meet the president directly.

Waller recently diverged from Powell and the rest of the Fed board by voting for a 0.25% rate cut, citing growing signs of weakness in the labor market. Just days later, new jobs data confirmed his concerns, showing a slowdown in employment growth over the past three months.

Nevertheless, Powell and other Fed leaders continue to favor a cautious approach, waiting to assess the economic impact of Trump’s tariffs before making any further policy moves. But with political pressure building, their patience may soon be tested.

#JeromePowell , #FederalReserve , #TRUMP , #Fed , #USPolitics

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