It’s Official: Trump Is Resetting the Fed 🇺🇸📉
A major shift in U.S. monetary policy is underway. President Trump has nominated Kevin Warsh to replace Jerome Powell as Federal Reserve Chair in May 2026, signaling a clear attempt to reset the Fed’s direction.
Warsh, once known as an inflation hawk during the 2008 financial crisis, has dramatically shifted his stance. He now argues that interest rates have stayed too high for too long and supports aggressive rate cuts to stimulate growth. At the same time, his strategy aims to control inflation by shrinking the Fed’s balance sheet, pulling excess liquidity out of the system while making borrowing cheaper.
This move also challenges the traditional independence of the Federal Reserve, as Trump has openly pushed for closer coordination between the White House and the Fed on interest rate decisions.
The backdrop is critical: with U.S. national debt exceeding $38 trillion, interest payments have become the government’s fastest-growing expense. Lower rates could ease this burden, potentially freeing funds for infrastructure, healthcare, and economic growth.
Markets are already reacting with volatility. Lower rates could boost stocks, housing, and consumer spending—but they may hurt savers and bondholders through reduced yields. The biggest risk remains inflation, and whether balance-sheet tightening can truly offset aggressive rate cuts.
2026 may mark a turning point for the dollar, global markets, and monetary policy as a whole.
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