"When Wall Street is talking more about Jerome Powell's successor at the head of the Federal Reserve than about the central bank's actions at its meeting this Wednesday, it's a sign of an anomaly in the market. The White House makes no secret of its desire to replace Powell who has been insulted, harassed, and denigrated by Trump with a loyal, compliant, and docile man like Kevin Hassett, the top White House economic adviser."
"Meanwhile, the Fed is experiencing its biggest internal division in decades as Trump and his team increase pressure for another interest rate cut. Questions are emerging about the independence of an organization where the Republican leader has already placed some pawns and is threatening a full takeover. Last summer, the billionaire president appointed his chief economist, 42-year-old Stephen Miran, to the Fed board."
"In the two meetings held since September by the Fed's Federal Open Market Committee (FOMC), the body that decides on interest rates, Miran voted for more aggressive cuts of half a percentage point. At the other end of the spectrum is the president of the Kansas City Fed, Jeff Schmid, who has opposed further rate cuts because he believes they could contribute to entrenching higher inflation instead of supporting the labor market."
Wall Street's focus has shifted from immediate Fed policy to who will replace Jerome Powell as Fed chair. The White House is openly seeking a loyal replacement such as Kevin Hassett. The president has already appointed allies to the Fed, including 42-year-old Stephen Miran, who has advocated aggressive half-point rate cuts. Fed officials are sharply divided, with as many as five of the twelve voting members publicly saying they do not see sufficient grounds for cutting rates. Regional Fed presidents like Kansas City's Jeff Schmid oppose cuts over fears of entrenching higher inflation.
Read at english.elpais.com
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