Trump Replacing Powell

President vs. Fed Chair

Jerome Powell’s term as Federal Reserve Chair is up in May of 2026. That hasn’t stopped Trump from already floating replacements. Trump has been critical of Powell due to the Fed Chair’s hesitancy to lower interest rates. Other countries have had many more rate cuts compared to the US. Lower rates will have a lot of benefits to the economy, but Powell is rightfully concerned about the inflationary nature of lower rates. It is unusual for a president to consider naming replacements this early, and at a minimum is an attempt to pressure Powell to start lowering rates soon or “You’re Fired”.

Mortgage Rate Outlook

Mortgage rates have recently dropped due to the likelihood that Powell will be replaced in 2026 and that there is increasing pressure from the president to lower the Fed Funds rate. The new Fed Chair is nominated by the president, who will almost certainly be select based on the candidates likelihood of lowering interest rates.