#美国消费者物价指数发布在即 $ZEN $DASH

The Fed Chair Tug-of-War: Trump’s Pressure Accelerates Market Bets on "Tough" Powell?

On January 15, the U.S. Department of Justice launched an investigation into Federal Reserve Chair Jerome Powell. Many initially thought this was a key move by Trump to pressure the Fed — but the market responded with a sharp rebuke.

Sources reveal an informal understanding between the two: if Powell voluntarily resigns at the end of his term in May, Trump promises to abandon attacks on the multi-billion dollar renovation plan for the Fed building. Once the DOJ investigation was announced, this plan was completely derailed.

The market’s reaction was faster than expected —
The probability of Powell leaving before the end of May dropped from 74% to 45%; the chance of leaving by the end of the year fell from 85% to 62%; meanwhile, the likelihood of him remaining until 2028 is rapidly increasing.

More intriguingly, the landscape of potential candidates is shifting. Haskett, whom Trump initially favored, saw a significant decline in support, while hawkish figure Wosh has surged as a top contender. The market is voting with its feet: the tougher the regulatory stance, the more traders favor that candidate.

This appears to be a losing outcome. Policy analysts note that more aggressive pressure might actually force Powell to stay on as an ordinary board member — true power shifts often require strategy, not bombast.

The contest for the Fed Chair position has always been so delicate. The apparent conflict is, in fact, a deep game of market expectations regarding regulation.