Trump Is Stuck With the Fed’s Powell. Will He Make Peace?
The president-elect needs the respected central bank chair to help keep the bond vigilantes at bay.
Fed Chair Jerome Powell testifies during a hearing before the House Financial Services Committee in 2020.
Photographer: Alex Wong/Getty Images North AmericaUS bond markets have had a minor meltdown since former President Donald Trump pulled ahead in prediction markets and then won a second term Tuesday, putting upward pressure on mortgages and other household borrowing costs. If the move continues, it could be a major source of disappointment for voters who trusted Trump to improve housing affordability and the cost of living.
Fortunately, there’s a clear way for him to mitigate that damage and start his term on the right foot with bond markets: He should declare his full faith in Federal Reserve Chair Jerome Powell, whose term runs until May 2026, and pledge to hold his tongue on matters of monetary policy.