Yeliz Akmaca 
Last week’s U.S. data helped ease uncertainty around monetary policy, boosting global markets. However, this week all eyes are on the Federal Reserve’s interest rate decision and Fed Chair Jerome Powell’s remarks. Adding further weight to the meeting, President Donald Trump’s sharp attacks on the central bank have put tensions front and center.
25 Basis Point Rate Cut Expected
Market pricing shows near certainty that the Fed will cut its policy rate by 25 basis points this week. Traders also expect three more cuts by year-end and at least three additional reductions in 2026. The latest CPI data came in line with forecasts, rising 0.4% month-over-month and 2.9% annually. Core CPI stood at 3.1% year-over-year.
Despite this, most economists believe a larger-scale cut is unlikely in the short term. Powell’s press conference following the decision will play a critical role in shaping expectations for the rest of the year.
Trump–Powell Tensions
President Trump criticized Powell as “inadequate” and called for an “immediate and significant cut.” He argued that while energy and food prices are easing, the housing market is being left behind due to high rates. Reports in U.S. media also claim Treasury Secretary Scott Bessent has been exploring potential successors to Powell.
Trump’s remarks have heightened political pressure on the Fed, reigniting debates about its independence and raising new questions over the credibility of the U.S. dollar.
The Lisa Cook Case and New Evidence
The Trump administration has sought to remove Fed Governor Lisa Cook over alleged “deceptive and potentially criminal” mortgage disclosures. Cook countered that the removal order exceeded presidential authority and violated her due process rights. On September 9, a federal court granted an injunction preventing her removal.
The administration has appealed the decision. However, newly published documents by NBC may weaken the government’s case. A May 2021 loan summary showed Cook’s Atlanta property listed as a vacation home—supporting her claim that it was declared as a second residence. The evidence could undermine allegations of misrepresentation in her mortgage filings.
Candidates for Powell’s Successor
Powell’s term expires in May 2026, and speculation about his successor is already heating up. Reported frontrunners include Kevin Hassett, Kevin Warsh, and Kevin Waller, while BlackRock executive Rick Rieder is also emerging as a strong candidate.
These developments place Fed independence and market credibility under intense scrutiny. Ahead of the decision, both political pressures and legal battles remain in sharp focus for global investors.
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