On December 9th, according to an analysis by Reuters columnist Jamie McGeever, although Jerome Powell's eight-year term as Federal Reserve Chairman will end next May, and the market widely expects him to be replaced by Kevin Hassett, Trump's chief economic advisor, market pricing clearly indicates that traders do not believe the Fed under Hassett's leadership will significantly ease monetary policy as Trump has hinted.
In fact, according to pricing in the interest rate futures market, the market's expected easing measure by the end of next year will be only a mere 75 basis points. This amounts to just three 25-basis-point rate cuts—likely two of which will occur before Powell leaves office, and only one after the new chairman takes office in the second half of 2026. The main reason for this is likely that during the transition period between Fed chairs, the expected inflation rate will still hover around 3%, and when the new chairman takes over, the real interest rate may be close to zero—meaning that the monetary policy environment is already very loose.
