On Friday, Jerome Powell's term as chair of the US Federal Reserve Board of Governors came to an end, with Trump appointee Kevin Warsh succeeding him. Powell, first appointed by Trump in 2018, will remain as a governor.

Powell's second term was marked by intense political pressure from the Trump administration, which pushed for more aggressive interest rate cuts. Powell consistently defended the central bank's independence, earning the nickname "Too Late Powell" from Trump for the Fed's hesitancy to cut rates quickly.

Under Powell, the Fed did not begin cutting rates until September 2023. Experts credit him with preserving Fed independence. Babak Hafezi of American University said: "He fought the Trump administration on lowering interest rates."

The Trump administration also launched an investigation into Powell over renovations at the Fed's headquarters, but no wrongdoing was found. Senator Thom Tillis blocked any nominee until the probe was dropped.

During the COVID-19 pandemic, Powell's Fed implemented massive support measures, including direct payments and lending programs. However, as inflation soared to a 40-year high, the Fed raised rates to 5.5% by July 2023.

New Chair Kevin Warsh faces a major test. JPMorgan analysts forecast the next rate change will be a 25-basis-point hike in Q3 2026. CME FedWatch shows a 97% chance rates will remain unchanged at the June meeting.

Source: www.aljazeera.com