Donald Trump has been pushing for the Federal Reserve system during his second presidency. Fed officials have consistently opposed Trump's pressure. However, the release of minutes from the Federal Open Market Committee revealed that by July 12 Federal Reserve Governors, Michelle Bowman and Christopher Waller, had spoken out in support of cutting fees. What is happening in the Federal Reserve and how does it affect the market?
summary
- 2025 has been a tense year for the Federal Reserve, while POTUS demands interest rates to be reduced, but the Fed is demanding that inflation risks be unable to follow.
- The FOMC minutes were released shortly before the Fed Chairman's key speech, revealing that the Fed's continued resistance will reduce interest rates.
- Despite maintaining the same position, July saw the split vote and raised unusual challenges with the Fed.
- Over 10 candidates are being considered for the 2026 Fed Chair Exchange.
News from the minutes of the Federal Open Market Committee
The results of the FOMC meetings from August 20th and July 29th to 30th were announced. It has been revealed that policymakers are concerned about the role of tariffs in boosting US inflation. They are not sure whether tariffs will have a one-off effect on prices or if they will cause permanent inflation increases. The head of the Fed did not reach a clear conclusion about the impact of tariffs on prices, but they agreed that inflation could potentially become uncontrollable.
Fed officials must tolerate what they consider to be a lower evil, as they need to balance it with supporting the labour market by reducing inflation. Throughout Trump's second presidency, Fed Chairman Jerome Powell and his colleagues stood together in opposition to cutting interest rates, as they saw the risk of inflationary peaks as a greater issue than unemployment.
This time again, they supported high interest rates as inflation continues to rise, and unemployment rates saw a slight decline. The majority of Fed governors voted to leave interest rates untouched in the 4.25%-4.5% range.
The biggest opposition in 30 years
Most Fed governors voted to keep interest rates intact, while Michelle Bowman and Christopher Waller voted to cut ¼ percentage points. Bowman supported her position by saying that inflation rates are relatively close to the committee's objectives when the impact of temporary tariffs is not considered while the labor market is losing dynamism.
More than that, Bowman has denounced high interest rates for slowing economic growth in 2025. According to the minutes document, Bowman believes that the gradual movement of interest rates has been hedged against further economic declines and potential growth in unemployment.
The next committee meeting is scheduled for September 16th. However, the closest event for Powell to give an important speech will take place on August 22nd in Jackson Hole, Wyoming.
Investor and blogger Scott Mercer, the investor and blogger known as the wolf wolf, may seem to argue that it is the biggest opposition in over 30 years, but he won by a high margin.
In 2025, the Fed is increasingly pushing to revert inflation to pre-19 rates (which they have not yet achieved) following long-term planned courses. Crypto communities often associate inflation hikes with crypto-price gatherings.
Good morning ☕️☀️pic.twitter.com/uuuotybnwo
– Tyler (@tylerdurden) August 19, 2025
Along with his unofficial anti-establishment persona, Trump has called out Powell's name and posted rude messages about him due to his denial of a consistent reduction rate. At one point, Trump accused Biden of appointing Powell as the Fed chair, forgetting that it was Trump, who appointed him in 2018. In July, Powell faced accusations of lying under oath. This was interpreted as a new line of attacks on interest rates. Powell's tenure ends in May 2026.
read more: Trump is about to fire federal government chairman Jerome Powell through the Supreme Court. Is good news for the crypto market?
Who is going to replace Powell?
Ahead of Powell's speech, some investors have already panicked their assets. There have already been rumors about some of the candidates for Powell's chair. Former Federal Reserve Bank President James Bullard claims he has spoken with U.S. Treasury Secretary Scott Bescent about the possibility of leading the Federal Reserve. Bullard's position on interest rates meets Donald Trump's demands as he believes that interest rates should be reduced by 100 basis points in 2026. At the same time, Bullard spoke out in favour of maintaining independence of agencies under the Federal Reserve Act. According to Bullard, the Fed will not cut interest rates in September.
🚨bullard: Rates are currently high, reducing 100 bps in 2026
– *Walter Bloomberg (@deitaone) August 21, 2025
Christopher Waller, who voted against keeping interest rates at the same level, is another possibility of Powell's successor. More than that, some people call him a favorite in the race. He is praised for his accurate predictions about inflation and his solid understanding of the Fed's work.
Other possible successors to Jerome Powell are Kevin Hassett, head of the National Economic Council, former Fed governor Kevin Wahsh and economist Mark Schmalin. Everyone criticizes the Fed for putting interest rates too high. According to Bessent, he has a list of 11 strong candidates for the Fed Chair position.
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